The amount of the transaction has not been disclosed, although unofficial sources point to a company valuation of under 100 million euros. In addition to the initial 30% acquisition, Indra has agreed on an option to increase its stake up to 100% of the share capital over the next two years.
Bankinter Analysis Team’s View:
Limited impact. The amount of the operation has not been published, but, a priori, it does not appear material for Indra. The purchase makes strategic sense and represents another step in the group’s strategy to reinforce its defense and cybersecurity solutions. Our view on Indra remains positive, and we maintain a Buy recommendation (Target Price €66.2; +14% upside potential) on the stock. The reasons:
(i) As the national defense champion, Indra is the primary beneficiary of the Special Modernization Programs (PEMs), which will serve as a catalyst for medium-term fundamentals.
(ii) Improvement in industrial capacity through alliances with sector companies to translate increased demand into deliveries.
(iii) Encouraging outlook ahead of the update to its 2030 Strategic Plan on November 25.
(iv) Attractive valuation multiples relative to the European defense sector average. For reference, the P/E 27e multiple at which Indra’s defense segment trades stands at ~19x vs. 22x for the sector average, whereas our implicit valuation equates to a P/E 27e for the segment of ~22.5x.
In our view, the current discount is not justified considering that the estimated growth rates for Indra’s defense segment are >+40% (25/28 Net Income CAGR) compared to +25% for the sector average.
