SKS Technologies (ASX:SKS) Surges 8% on A$60M Contract Wins and FY26 Guidance Upgrade- Buy or Take Profits?

SKS Technologies jumps on new contracts and stronger margins

SKS Technologies (ASX: SKS) jumped 8.5 per cent to A$3.83 on Thursday after landing A$60 million in new contracts and raising its profit outlook. The company now expects to bring in A$340 million in revenue this financial year, up from its earlier forecast of A$320 million. Operating efficiency has driven NPBT margins to 10 per cent, resulting in a projected A$34 million in profit before tax.

The trajectory is steep: revenue has rocketed from A$83 million in FY23 to A$261 million in FY25 and is now on track to hit A$340 million in FY26. That kind of growth catches attention, but it also raises a fair question: Is there still room to run, or has the market already priced in the good news?

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SKS Technologies Rides Australia’s Data Centre Boom as NEXTDC Pipeline Expands

The latest contract wins tell you where the growth is coming from. SKS Technologies secured work on NEXTDC’s M3 Stage 4 hyperscale data centre expansion in Melbourne, as well as a fit-out contract for Ernst & Young’s new office. Both projects play to the company’s core strength: installing the electrical, audio-visual, and communications systems that make modern buildings work.

Data centres now make up more than half of what SKS Technologies does. That makes the company a pick-and-shovel play on the AI and cloud computing wave sweeping through Australia. While chip stocks can swing wildly on supply chain news, companies like SKS are quietly doing the physical work of building out digital infrastructure.

What stands out here is the repeat business. Around 94 per cent of SKS’s work comes from existing customers, which suggests they are doing something right. Happy clients keep coming back, and that gives the company a steady pipeline. Work on hand now sits at a record A$325 million, so revenue visibility into the second half of the year looks strong.

The main risk to watch is concentration. NEXTDC is a big client, and if that relationship ever soured, it would hurt.

Delta Elcom Acquisition Opens the Door to NSW

The completion of the Delta Elcom acquisition in January 2026 is a strategic pivot, giving SKS an immediate A$25 million revenue base and a strong footprint in New South Wales, Australia’s largest data centre market.

What makes this encouraging is the margin story. Operating margins have climbed from under 5 per cent two years ago to nearly 8 per cent in FY25, and management is now guiding to 10 per cent. That tells us the business is becoming more efficient as it grows, which is exactly what you want to see. If Delta Elcom integrates well, it could add both revenue and further margin gains.

The Investor’s Takeaway for SKS Technologies

The growth here is real and impressive. Revenue nearly doubled last year, and the three-year growth rate is running at 57 per cent annually. For a company that installs cables and screens, that is remarkable.

But the stock has moved a long way already. At A$3.83, it still sits below the analyst target of A$4.00, offering some potential upside, though it remains roughly 15 per cent below its all-time high of A$4.48. The stock also carries a beta of 2.15, meaning it swings harder than the broader market in both directions.

In our view, further upside from here needs fresh catalysts, more contract wins, margins pushing beyond 10 per cent, or the Delta Elcom deal outperforming. For growth investors comfortable with volatility, SKS Technologies remains an attractive way to play Australia’s data centre buildout. But if you prefer to buy on weakness, waiting for a pullback might be the smarter move.