The disconnect between CSG’s operational momentum and its stock market performance is becoming harder to ignore. While the defence group presses ahead with capacity expansion and new contract wins, its shares closed Friday at €16.62, down 2.5 percent on the day and roughly 11 percent lower over the past seven sessions — a losing streak that has left the equity trading about 54 percent below its 52-week high of €36.05, reached at the end of January.
The latest move came despite the company announcing a fresh investment of approximately €49.7 million over three years to expand production of military ground systems and related infrastructure at its Tatra Defence subsidiary in Kopřivnice, Czech Republic. The outlay signals management’s expectation that demand from European and other buyers will persist, building on what was previously a facility focused on executing orders rather than scaling capacity.
That expansion narrative has plenty of supporting data. In its half-year report published on August 7, CSG posted revenue of €3.251 billion, up 17.2 percent year-on-year, with the core defence systems business growing 27.0 percent. Operating EBIT advanced 12.7 percent to €784 million, translating to a margin of 24.1 percent — comfortably within the company’s own target range. The order book, including the pipeline under negotiation, climbed to €46 billion from €44 billion in March, with the land systems division the principal contributor. Management reaffirmed its full-year 2026 guidance of €7.4 billion to €7.6 billion in revenue at an EBIT margin between 24 and 25 percent.
There are also signs that cash tied up in inventory will start flowing back. CSG has flagged a working capital release of €1.5 billion in the second half, tied to the deliberate stockpiling of components for its ammunition business — an effect expected to unwind mainly in the fourth quarter.
Recent contract activity has been steady. Late August brought orders worth more than $50 million for AM-70 and AM-50 bridge-laying vehicles from five customers across Europe, the Middle East and Southeast Asia — a geographic spread that underscores CSG’s push beyond its regional roots into the international market for specialised military vehicles. In mid-August, the group’s Federal Ammunition unit, part of the Kinetic Group, was selected by Nordic police forces as a supplier of service and training ammunition. Early September saw CSG confirm that several of its companies — including Tatra Export, Excalibur Army and AviaNera Technologies — would present products at the MSPO defence fair in Kielce, Poland, which begins next week. The group is also scheduled to appear at the ADEX exhibition in Baku at the end of September, another potential source of order announcements.
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The company has also strengthened its board, appointing industry veteran Ben Hudson as member and vice-chairman in early August, a move it linked to the growing strategic importance of land defence systems and technological innovation.
Sentiment on the stock, however, remains fragile. Investors may still be nursing memories of the sharp sell-off in May, when a short-seller raised questions about the company’s production capacity and business model. CSG rejected those allegations at the time, pointing to its network of distributed manufacturing sites and plans to expand in-house production to 1.1 million rounds in the medium term. Fitch, for its part, affirmed CSG’s rating with a stable outlook back in February, citing the group’s dominant market position — an assessment that predates the current investment phase but speaks to the solidity of its credit profile.
The market’s apparent indifference to the steady flow of positive news suggests investors are weighing operational progress against valuation concerns and broader risk aversion toward the defence sector. Whether that gap closes may depend on how the Kopřivnice investment and other capacity additions translate into concrete financial results. The next test comes with the third-quarter report on November 11, when the market will see if operational strength can finally move the share price.
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