The stock of KNR Constructions rose by an impressive 20 per cent last week, on the back of strong order wins. The company managed to win two contracts totalling about ₹1,055 crore from the NHAI and Karnataka Road Development Corporation. One of them is a hybrid annuity model deal worth ₹920 crore, indicating that the company has been able to make inroads into such projects as well; it is usually focussed on EPC contracts.

The order book before this deal was an impressive ₹5,500 crore. Last month, CRISIL upgraded KNR’s long-term loan facility to AA- from A+, suggesting improving operational performance and a reasonable working-capital cycle. The company’s third quarter results were reasonable. Given the weak sentiment associated with the highway construction in recent quarters, the steady order wins gave the market a reason to lift the stock. Even after this rally, the stock of KNR trades at an inexpensive 14 times trailing earnings.