IPD Group Ltd (ASX: IPG) delivered a strong set of financial results recently, with broker Shaw and Partners predicting the shares are going to hit a new high watermark as a result.
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ASX industrial with good data centre exposure
IPD is a diversified electrical contractor, and has wide exposure to the fast-growing data centre market in Australia.
The company last week reported record revenue of $414.3 million, up 16.8%, and underlying net profit of $30.9 million, up 17.9%.
IPD said its diversified product offering continued to drive growth in key infrastructure sectors.
The company said:
Data Centre revenue grew 27% on the previous corresponding period to $71.5 million. The acquisition of Platinum Cables has expanded the Groups revenue base with greater end market diversification, Infrastructure/Industrial/Mining is now the Group's largest industry segment. Gross Profit Margins continue to reflect the order book pivot towards more complex and competitive orders.
IPD said the acquisition of Platinum Cables was "highly accretive" and the $37.5 million consideration paid during the year was predominantly cash and debt funded.
The company said group revenue had grown at a 28.5% compound annual growth rate over the past five years, from a starting point of $118.1 million, "with growth broadly evenly split between organic growth and acquisitions''.
IPD declared a final dividend of 7.9 cents per share, payable on October 8, bringing total dividends for the year to 14.7 cents.
On the outlook the company said:
IPD Group has entered FY27 with positive momentum following record FY26 results, underpinned by a diversified portfolio of businesses with exposure to growing sectors benefitting from long-term structural tailwinds and ongoing investment. Management remains focused on executing its strategy and maximising shareholder value through operational excellence, disciplined capital allocation, strategic acquisitions and investment in growth opportunities.
Broker says shares are looking cheap
Shaw and Partners said it was an impressive result.
The broker said:
IPG delivered another standout result in FY26, surpassing guidance and demonstrating that the business is emerging as a key beneficiary of Australia's accelerating investment in AI, data centres, electrification and critical infrastructure. Record earnings, expanding margins, strong free cash flow conversion and continued deleveraging provide further evidence of a scalable, high-quality business model, while recent acquisitions and operational initiatives add additional growth levers. With over 60% of Group revenue exposed to AI-adjacent and infrastructure growth markets, multiple structural tailwinds gathering pace and management entering FY27 with positive momentum, we see IPG as one of the ASX's most compelling industrial growth stories.
Shaw and Partners increased its price target on the company from $5.85 to $6.70 per share, which would be a historical high if achieved.
IPD shares are currently changing hands for $5.70. The company is valued at $592.7 million.
