Indra Sistemas, S.A. (IDR.MC)
Damodaran FCFF DCF — valuation as of 2026-05-24
At today's price of €52.68 EUR you'd pay €9.31 B for the whole
business; DCF (base case) says it's worth €5.57 B (EUR equity);
margin of safety = -67.1%. BIMODAL HEADLINE (per council): blended
intrinsic = 0.60 × base €29.67 + 0.40 × bull €67.47 =
€44.79 = -15.0% MoS vs market €52.68.
Intrinsic / share
31.53 EUR
Market / share
52.68 EUR
Margin of safety
-67.1%
Enterprise value
€9.15 B
Equity value
€6.55 B
WACC
6.86%
STANDALONE CONGLOMERATE base scenario (60% probability per council). Backlog €20.3B at Q1 2026 (book-to-bill 3.61x) provides multi-year revenue visibility, but the post-Escribano/post-Mozos management vacuum + AQR max-short + Minsait drag together justify the conservative anchor. Per-segment trajectory: - Defence_Aerospace_Group: €2,328M base → €7,200M Y10 (~12% CAGR). Defence backlog conversion drives Y1-5 at 16%; Y6-10 transitions to 7-8% as Spanish national programs mature. EBIT margin holds 14.3% through Y5 then stays at 14% Y10 — bundle math: Defence pure 17% + ATM 13% + Mobility 6% blends to ~14%, NOT 17%, because the bundle includes the lower-margin ATM/Mobility lines (~37% of bundle revenue at Y10). The SEPI champion scenario lifts this to 17% via Hispasat synergies + cost-out + ATM scale. - Minsait: €3,129M base → €4,100M Y10 (~3% CAGR). Persistent commodity IT services drag; new CEO without political cover for spin/partner cannot re-rate this. Margin holds 5% Y10 (single-digit forever). Consolidated Y10: €11,300M revenue, ~10.7% EBIT margin (Defence_etc 14% × 63.7% mix + Minsait 5% × 36.3% mix). Roughly matches FY30 management ambition of €10B / >12% EBITDA = ~10% EBIT, modest premium from later cycle date and conservative assumption that mgmt sandbags FY26 guidance. The SEPI champion bull scenario (40% weight) in scenarios.yaml takes Y10 revenue to €14,500M and EBIT margin to 12.5% with Minsait partial re-rate.
Business breakdown
Year-10 revenue and target operating margin per operating segment (sum-of-parts where applicable).
| Segment | Year-10 revenue | Target op margin |
|---|---|---|
| Defence_Aerospace_Group | €7.20 B | 14.00% |
| Minsait | €4.10 B | 5.00% |
Cost of capital
| Levered beta | 1.1017 |
| Mature-market ERP | 0.00% |
| Weighted country risk premium | 1.36% |
| Cost of equity | 8.56% |
| Pre-tax cost of debt | 2.10% |
| Synthetic rating | Aaa/AAA |
| WACC | 6.86% |
Year-by-year DCF
| Year | Revenue | Op margin | EBIT | EBIT (1−t) | Reinvestment | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | €5.82 B | 9.57% | €557 M | €435 M | €220 M | €215 M | €201 M |
| 2 | €6.22 B | 9.70% | €603 M | €470 M | €243 M | €228 M | €199 M |
| 3 | €6.66 B | 9.82% | €654 M | €510 M | €269 M | €241 M | €198 M |
| 4 | €7.14 B | 9.95% | €711 M | €554 M | €297 M | €257 M | €197 M |
| 5 | €7.68 B | 10.08% | €774 M | €603 M | €330 M | €274 M | €196 M |
| 6 | €8.26 B | 10.21% | €844 M | €653 M | €457 M | €196 M | €132 M |
| 7 | €8.91 B | 10.34% | €922 M | €708 M | €507 M | €201 M | €126 M |
| 8 | €9.63 B | 10.47% | €1.01 B | €768 M | €563 M | €206 M | €121 M |
| 9 | €10.42 B | 10.60% | €1.11 B | €836 M | €625 M | €210 M | €116 M |
| 10 | €11.30 B | 10.73% | €1.21 B | €910 M | €695 M | €214 M | €110 M |
Terminal value
| Stable WACC | 6.86% |
| Stable ROC | 0.00% |
| Terminal growth | 1.80% |
| Terminal value (un-discounted) | €15.05 B |
| Terminal contribution to EV | 82.6% |
Adjustments
- R&D capitalization: on
- Lease capitalization: off
- Failure-rate adjustment: on — p=3.00%
- ESO subtraction: off
- Synthetic rating: Aaa/AAA (spread 0.40%, pre-tax CoD 2.80%)
Sensitivity tornado
Each input perturbed ±10%. Bars show signed % change in equity per share.
Sensitivity not run for this valuation (Monte Carlo used instead).
Scenarios
Bear (NOT in headline)
13.87 EUR/sh
EV €5.87 B, gov 25%
MoS -73.7%
Base (60% weight)
29.67 EUR/sh
EV €9.15 B, gov 20%
MoS -43.7%
Bull (40% weight)
67.47 EUR/sh
EV €15.84 B, gov 10%
MoS +28.1%
Monte Carlo
Mean 40.40 ± 5.19 EUR/sh, 1000 iterations (0 failed). P(intrinsic < market 52.68 EUR) = 99.1%.
NOTE: MC ran on the base/standalone scenario only (60% weight). It does NOT capture the bimodal scenario weighting between standalone and SEPI champion — see scenarios cards above for that.
p531.97 EUR/sh
p2536.83 EUR/sh
p5040.28 EUR/sh
p7543.86 EUR/sh
p9549.17 EUR/sh
Diagnostics
No diagnostics.