While the Nifty Metals Index has gained 10.35 percent so far this year, shares of the world's biggest coal miner, Coal India Ltd., have fallen 11.55 percent during the period.
The company's profit in the three months ended March declined 38 percent, mainly on account of higher-than-expected employee costs.
Still, 71 percent of the analysts tracked by Bloomberg have a ‘buy' rating on the stock with a return potential of 18 percent. It's trading at a discount of 54 percent to its seven-year average price to earnings of 24.
Analysts at Ambit Capital believe pick-up in volumes and e-auction realisations are the key factors to watch out for.
Also Read: Coal India's Output Declines Amid Focus on Clearing Stockpiles
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