Hensoldt Secures Police Contract Amid Billion-Euro Capacity Push

Hensoldt secures a key Bundespolizei contract for mobile counter-drone systems, diversifying into civil security as it expands to manage a €9 billion order backlog and hires 1,600 new staff.

A major new contract from Germany's federal police force has arrived as defense electronics specialist Hensoldt is already straining to manage a near-record order backlog. The company announced this week it will supply the Bundespolizei with highly mobile counter-drone systems, marking a strategic expansion beyond its traditional military customer base.

The deal involves c-UAS vehicles—mobile units capable of detecting, verifying, and neutralizing unmanned aerial threats. Designed for rapid deployment to protect critical infrastructure, the systems will bolster a dedicated police drone defense unit established in 2025. This move into the civil-security sector diversifies Hensoldt's revenue streams and reduces reliance on single defense procurement programs.

This contract win comes as the company executes a massive operational expansion to convert its towering order book into revenue. Hensoldt is currently managing a backlog worth almost nine billion euros, compelling management to act. A one-billion-euro investment package is being deployed to build new production sites and boost software development capabilities.

Concurrently, the workforce is undergoing significant growth. Hensoldt plans to hire 1,600 new employees by mid-2026, expanding its current headcount by nearly one-fifth. This scaling is viewed as essential to meet soaring customer demand. The operational tempo was highlighted this week by the delivery of 50 radar systems from its UK subsidiary to SRT Marine System Solutions for coastal surveillance.

The strategic build-out and broadening clientele are drawing fresh analyst attention. On Friday, Stifel initiated coverage with a Buy rating and a €90 price target. Analyst Thomas Mordelle pointed to Hensoldt's new strategic phase and its strengthening role within European defense architecture, particularly through projects like the Eurofighter radar.

This view adds to a generally bullish consensus. Just a day earlier, Deutsche Bank reaffirmed its Buy recommendation with a €101 target, with analyst Christophe Menard anticipating a strong outlook in the upcoming quarterly report. Barclays maintains a more cautious stance with a €95 target. Despite the positive notes, the share price, trading around €83, sits meaningfully below all these estimates. The stock gained almost three percent in the MDAX on Friday.

For the current fiscal year, management is targeting total revenue of €2.75 billion and an adjusted operating margin of approximately 19 percent. Success in hitting these milestones and executing its expansion could see the stock gradually close its substantial valuation gap to previous highs.