Renk’s Strongest Quarter Clashes with Ownership Uncertainty as KNDS Mulls Stake Sale

Defence gear maker Renk reports best-ever Q1 with €6.9B backlog, but shares languish as major investor KNDS mulls block sale before its IPO.

Renk delivered its best-ever start to a financial year, yet the company’s shares are still trading nearly 46% below their 52-week high — a disconnect that highlights how much of the stock’s fate now rests on the plans of its largest investor. The defence gear specialist booked €582.3 million in new orders during the first quarter of 2026, pushing its total backlog to a record €6.9 billion. But the market’s attention has shifted to the prospect of a block sale by major shareholder KNDS, the Franco-German tank maker gearing up for a state-backed initial public offering this summer.

Berlin is set to take a 40% stake in KNDS before the IPO, a move that has prompted the panzer builder to review its own holdings — including its position in Renk. KNDS is now examining whether to offload its equity in the Augsburg-based company, a decision that would reshape Renk’s shareholder base just as the group is reporting its strongest operational figures. The uncertainty over who will own those shares next has kept a lid on the stock even as the underlying business fires on all cylinders.

Investors got a reprieve on Thursday, however, when the news of KNDS’s potential exit sent Renk’s shares up more than 2% to €48.85. That came after the stock had touched a 52-week low of roughly €44 only days earlier, on 15 May. The recent bounce has lifted the price about 10% in the past seven trading sessions, though technical indicators now flash a warning: the relative strength index signals a strongly overbought condition, suggesting the rally may be running ahead of itself.

Operationally, Renk’s first-quarter numbers leave little to criticise. Revenue rose to €283.6 million, while adjusted earnings before interest and taxes climbed to €42.4 million, pushing the adjusted EBIT margin to 15.0%. The core Vehicle Mobility Solutions segment was the main driver: order intake there surged to €478.4 million, revenue hit €191.5 million, and the adjusted EBIT margin improved to 18.3% from 16.6% a year earlier. Earnings per share swung from a penny to €0.15 — a fifteenfold jump that underscores the operating leverage in Renk’s business model.

Yet the order-to-cash conversion remains the central question. Renk cautioned that customer call-off and delivery schedules are weighted toward the second half, meaning the bulk of the record €6.9 billion backlog will only translate into revenue and profit later this year. Management has reaffirmed its 2026 guidance: revenue above €1.5 billion and adjusted EBIT in a range of €255 million to €285 million. Analysts, for their part, see full-year earnings per share averaging €1.73, with the dividend expected to rise to €0.72 from last year’s €0.58.

The project pipeline is concrete. Renk disclosed a NATO main battle tank programme worth €157 million, with first deliveries pencilled in for late 2026. Additional orders have come in for the PUMA infantry fighting vehicle programme, covering 188 gearboxes along with suspension systems and side gearboxes. The message from the company is clear: demand is there, but patience is required.

For shareholders, the near-term calendar is packed. Renk executives are working the roadshow circuit — the Berenberg European Conference in New York is done, with the dbAccess European Champions Conference in Frankfurt on 26 May and the Erste Group Conference in Warsaw on 27-28 May next. The annual general meeting in Augsburg follows on 10 June. Then comes the next big operational milestone: second-quarter results on 6 August.

The stock, at €48.12, still trades about 19% below its 200-day moving average. The KNDS stake overhang means that even a record order book cannot fully dispel the cloud. If the block sale materialises, new investors will have to absorb the shares — a process that could temporarily depress the price. The ultimate test for Renk, however, is not who owns the stock but whether it can turn that €6.9 billion pipeline into sustainable margin expansion. The second half of the year will begin to supply the answer.