KNR Constructions Soars Over 9% After ₹4,800 Crore Coal Block Contract Win from NTPC JV

Mumbai, 25 June 2025: Shares of KNR Constructions Ltd (NSE: KNRCON) surged 9.1% intraday on Wednesday following the announcement of a major coal mining contract valued at ₹4,800.57 crore. The contract was awarded by Patratu Vidyut Utpadan Nigam Ltd, a joint venture between NTPC Ltd and Jharkhand Bijli Vitran Nigam Ltd (JBVNL).

The stock climbed ₹19.32 to trade at ₹231.50, compared to its previous closing price of ₹212.18, reaching a daily peak of ₹235.70. As of 3:36 PM IST, around 66.75 lakh shares were exchanged, contributing to a total turnover of ₹153.38 crore.

MARKET PERFORMANCE SNAPSHOT

Coal Block Deal Sparks Buying Interest

The upward momentum was sparked by KNR’s official confirmation of receiving a Letter of Acceptance for the development and operation of the Banhardih Coal Mining Block in Jharkhand. The project will involve a 360-day development phase, followed by five years of operational activity.

KNR holds a 74% equity stake in the special purpose vehicle formed for this project, while the remaining 26% is owned by Harsha Constructions Pvt Ltd. The mine holds an estimated reserve of 34.50 million tonnes, adding substantial value to KNR’s infrastructure and mining portfolio.

Stock Approaches Key Resistance with High Volume Support

The rally propelled KNR’s stock past the psychological ₹230 resistance level, aligning closely with its VWAP (₹229.78). High delivery volumes indicated strong institutional participation and long-term buying sentiment, further supported by a promising order book and revenue visibility.

Strategic Move Enhances Future Order Pipeline

This coal block win marks a strategic shift for KNR Constructions, traditionally known for its infrastructure projects in roads, highways, and irrigation. The new venture into coal mining positions the company to diversify its revenue streams and tap into energy sector opportunities.

KNR, which has been listed on the stock exchange since February 2008, is part of the NIFTY 500 index and trades at an attractive P/E of 5.70, making it one of the lower-valued plays in the construction sector.

Robust Financials and Expansion Drive

While the coal mining contract has generated immediate market interest, it’s worth noting that KNR Constructions recently reported strong quarterly results, with net profit growth of 23.4% YoY in Q4 FY25, supported by stable margins and consistent project execution.

Moreover, the company has been actively bidding for hybrid annuity model (HAM) road projects, with over ₹2,000 crore worth of bids currently under evaluation. KNR is also focusing on asset-light project partnerships to improve capital efficiency.

In a recent interview, senior management indicated interest in building long-term capabilities in mining services, hinting that the current project could be the first of many in the company’s new vertical.

Outlook: Strong Momentum Likely to Continue

The ₹4,800 crore contract win significantly strengthens KNR’s order backlog, which now stands above ₹11,000 crore, offering visibility for the next three to four years. Analysts suggest that if project execution stays on track, KNR may see a re-rating in its valuation multiples due to its entry into high-margin mining operations.

Brokerages are expected to revise their price targets upwards, citing a mix of valuation comfort, order book growth, and sectoral diversification. Investors are likely to track upcoming quarterly results and progress updates on the Jharkhand coal block for further cues.

REF: https://nsearchives.nseindia.com/corporate/KNRCON_25062025151326_IntimationLOANTPC.pdf

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