Vishnu Prakash R Punglia Limited has received a contract termination notice from North Western Railway regarding the Jaipur-Sawai Madhopur Doubling Project. The company made this disclosure on January 14, under Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements Regulations, 2015.

Contract Details and Scope

The terminated contract encompassed extensive railway infrastructure development work between Jaipur-Chaksu stations, spanning from Km 131.270 to Km 87.60. The project scope included multiple components of railway construction and development.

Termination Notice Details

The company received the termination communication on January 13 from North Western Railway. According to the notice, the contract stands rescinded, and the remaining work will proceed independently without the company's participation.

Financial Impact and Market Response

The termination carries significant financial implications for Vishnu Prakash R Punglia Limited. The anticipated financial impact amounts to ₹8.87 crore (88.70 million rupees), representing the forfeiture of performance guarantee and security deposit.

Despite the contract termination news, shares of Vishnu Prakash R Punglia Limited closed at ₹49.60, up ₹0.43 or 0.87% in the trading session.

Legal Response

In response to the termination notice, the company has initiated legal proceedings to challenge the railway authority's decision. On January 14, Vishnu Prakash R Punglia Limited filed a writ petition along with a stay application in the Rajasthan High Court, Jodhpur.

The legal remedy seeks two primary objectives:

• Quashing the contract rescission order
• Preventing the department from encashing the bank guarantee

The company's swift legal response demonstrates its intention to contest the termination and protect its financial interests in the disputed contract matter.

Vishnu Prakash R Punglia Ltd experienced notable market activity as promoters completed a strategic stake sale while simultaneously demonstrating confidence through immediate reinvestment. The infrastructure development company's stock declined despite the capital infusion, reflecting mixed investor sentiment around the recent corporate actions.

Promoter Stake Sale and Reinvestment

The promoter and promoter group divested an aggregate 19.18% equity stake in the company, building upon an earlier 9.15% stake sale disclosed on October 3, 2025. The complete divestment generated proceeds of approximately ₹200 crore, which the promoters immediately reinvested back into the company through an interest-free loan.

The company highlighted that this capital infusion underlines the promoters' strong confidence in VPRPL's fundamentals, long-term growth prospects, and business strategy.

Stock Performance and Valuation

Despite the promoter reinvestment, shares declined nearly 3.50% during Monday's trading session. The stock hit an intraday low of ₹48.80, representing a 3.00% decline from the previous close of ₹50.50. With a market capitalization of ₹616 crore, the company currently trades at a price-to-earnings ratio of 20.00, which is higher than the industry average of 17.70.

Financial Performance Analysis

The company's Q2FY26 results showed mixed performance across key metrics. Revenue declined year-on-year but demonstrated sequential growth, while profitability faced significant pressure.

Despite recent quarterly challenges, the company maintains strong long-term growth metrics with a 5-year sales CAGR of 27% and profit CAGR of 36%. Additionally, foreign institutional investor holdings increased significantly from 0.11% in Q1FY26 to 1.34% in Q2FY26.

Business Portfolio and Order Book

Vishnu Prakash R Punglia Limited maintains a diversified infrastructure portfolio with a robust order book of ₹5,001 crore as of Q2FY26. The order composition reflects the company's multi-sector approach:

Incorporated in 1986, the infrastructure development company operates across 9 states and 1 Union Territory, serving Central and State Governments, autonomous authorities, and private sector clients. The company's established presence spans design and construction projects across multiple infrastructure verticals, positioning it for continued participation in India's infrastructure development initiatives.