Strike at Mahindra's Igatpuri plant ends - Angel Broking

Mahindra and Mahindra (MM) has announced that the 14 day long tool down strike at its Igatpuri plant has been called off and the workers at the plant have resumed normal work beginning April 22, 2013. The workers at the Igatpuri plant of the company were on a tool down strike since April 9, 2013 to protest the suspension of two workers by the company on the disciplinary grounds. As a part of the settlement process, the company gave into the Union's demand of reinstatement of the suspended workers. Further, the management also agreed to withdraw the charge sheet proceedings against the suspended workers.

The Igatpuri plant of MM manufactures engines for the utility vehicles and has a capacity to manufacture ~1,100 units/ day. As per media reports, MM has suffered production loss of ~8,000 units due to the strike. Nevertheless, we do not see a major impact of the strike on company's operations considering that MM had 3-4 weeks of inventory of utility vehicle and another 3-4 weeks inventory of engines at the plant before the strike.

We maintain our positive view on MM. Currently we have an Accumulate rating on the stock with an SOTP based target price of Rs. 1,006.

Source : Equity Bulls

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