ASX industrials stock IPD Group Ltd (ASX: IPG) finished last week with a bang.
It climbed 13% in a single session following the release of its FY26 results.
The company is a national distributor and service provider to the Australian electrical market.
Its core focus is power distribution, power monitoring, industrial control, renewables, test and measurement, and services, across power generation, commercial, hospitality, infrastructure, and sports and leisure facilities.
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What did the company report?
As reported by The Motley Fool's Laura Stewart on Friday, the company posted record results for FY26, exceeding its own guidance.
Results included:
- Revenue of $414.3 million, up 16.8% on the prior corresponding period (pcp)
- Underlying EBITDA of $55.4 million, up 19.4%
- Underlying NPAT of $30.9 million, up 17.9%
- Fully franked dividends of 14.7 cents per share, up 16.7%
- Operating free cash flow (before interest and tax) of $46.8 million, with strong 84.4% conversion
- Net debt reduced to $16.4 million as at 30 June 2026.
Investors were quick to buy up ASX industrials stocks, leading to a massive rise on Friday.
Heading into a fresh week of trading, the team at Bell Potter believes there's more upside to come.
Buy recommendation for ASX industrials stock
Bell Potter's report included an unchanged buy rating for this ASX industrials stock.
The broker views IPG's FY26 result as a strong outcome, with underlying EBITDA of $55.4m, up 19% year-on-year and slightly ahead of both its estimate and consensus.
Revenue increased 17% to $414m, driven by solid growth across IPD and CMI and particularly strong 35% growth in Ex Engineering, with Data Centre revenue up 27% to $71.5m.
The broker said gross margin eased to 33.4% due to a higher mix of competitively priced orders, but EBITDA margin improved to 13.4%, while underlying NPAT rose 18% to $30.9m.
Management entered FY27 with positive momentum and expects its businesses to continue benefiting from structural growth trends and ongoing investment, while maintaining a disciplined approach to capital allocation, organic investment and acquisitions.
Further upside ahead
Based on this guidance, the team at Bell Potter increased its price target on this ASX industrials stock to $6.50 (previously $6.20).
From last week's closing price, this indicates an upside potential of 14%.
IPG is well positioned to continue delivering strong earnings growth from booming investment in the Data Centre construction, complementing robust revenue growth across the CMI and EX Engineering businesses. Conversion of advanced M&A opportunities represents upside to near-term consensus earnings expectations.
