It's a good timing for MarketScreener too, which added the stock to its Europe portfolio just the day before its surge. The group, which had been flying under the radar so to speak, had stayed on the sidelines of the European rally in defense stocks - no doubt for lack of direct exposure to Ukraine.
This wait-and-see stance by the market gave little credit to Indra's strategic plan which, after consolidating the Spanish market in line with what BAE, Thales or Leonardo have done on their home markets, aimed to double its revenue in 5 years.
Over the past 5 years, it is profits that have doubled, thanks to an order book that is more dynamic than ever, coupled with a strong expansion in margins. Traditionally valued at between 6x and 8x its EBITDA, Indra is now trading on record multiples of 11x to 12x EBITDA.
Indeed, the Madrid-based group is not in the habit of setting investors' pulses racing. Until now it had shown only very modest growth and was even emerging from a long period of stagnation.
The relative resilience of its activities, which are essential to many strategic sectors, was marred by structurally weak margins and an exposure still too heavy - 40% of revenue - to the Spanish market and its public-sector orders.
The recent rally is also being supported by the potential acquisition of EM&E, founded by the brother of the group's current chairman. The Escribano family is Indra's largest private shareholder, with 14% of the capital, behind the Spanish state with 28%. The fourth-largest shareholder, activist fund Amber Capital, has already come out in favour of the merger, which it is actively promoting.
While the potential conflict of interest is obvious, the transaction would give Indra a presence in Ukraine that it does not currently have, as well as adding ready-to-use military equipment to its catalogue - whereas until now the group has confined itself to supplying components for systems assembled by others.
