Bell Potter has been busy running the rule over a recent update from a popular ASX stock.
The good news is that the broker was pleased with the update and has boosted its valuation to reflect this.
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Which ASX stock?
The stock that has found itself in the good books with Bell Potter is IPD Group Ltd (ASX: IPG).
It is a leading Australian distributor of electrical equipment and industrial digital technologies, operating nine distribution centres and servicing over 4,200+ customers nationally.
Bell Potter notes that the ASX stock supplies products used in buildings, infrastructure, and process sectors that help to reduce energy use or reliance on the transmission network.
The broker highlights that IPD Group released a guidance update last week. It said:
FY26 underlying EBITDA is forecast to be $54.5-55.3m (BPe $55.2m; consensus $55.6m) and underlying EBIT is expected to be $46.3-47.1m (BPe $47.5m; consensus $47.5m). Growth at the midpoint of these ranges is 18% and 19%, respectively. Excluding earnings contribution from the recently acquired Platinum Cables business (completed 31 December 2025), underlying EBITDA and EBIT is estimated to be within the range of $50.5-51.3m and $42.7-43.5m, respectively, representing 10% growth at the midpoint for both metrics.
One key driver of growth has been its work in the data centre market. Bell Potter adds:
Data Centre revenue growth continues to trend strongly in 2H FY26, up 25% on the PcP (BPe 20%). Meanwhile, Group revenue is anticipated to expand in FY26 (BPe 16% with Platinum Cables and 10% organic; vs 9% growth in 1H FY26). Strong growth is noted across the core IPD business and Ex Engineering, as well as a record result from CMI, with sales to exceed pre-IPD acquisition levels.
The good news is that the data centre market remains strong and further strong growth is expected in FY 2027. It adds:
R3M Commercial construction building approval values have maintained a strong double digit YoY growth trend since Oct'25, with Mar'26 building approval values growing 18% YoY. Our proxy for Data Centre building approval values is demonstrating a significant step-up since Nov'25; the R3M hit a record in Feb'26, expanding 263% YoY. In Mar'26, values were up 121% YoY.
Should you invest?
In response to the update, Bell Potter has retained its buy rating on the ASX stock with an improved price target of $6.20 (from $5.30).
Based on its current share price of $5.32, this implies potential upside of 16.5% for investors over the next 12 months.
It also expects a 2.7% dividend yield over the period, boosting the total potential return beyond 19%.
Commenting on its buy recommendation, Bell Potter said:
We have applied a lower ERP in our WACC given heightened sentiment for companies leveraged to data centre and electrification investment thematics. We see IPG as a key beneficiary to rising investments levels in the data centre sector.
