Moneycontrol
Mar 08, 2013 10:34 AM IST | Source: Moneycontrol.com

M&M Nashik plant workers end strike after co strikes deal

The tool down strike at Mahindra & Mahindra's automotive plant at Nashik in Maharashtra, which began on Tuesday, has ended, the utility vehicle maker said on Thursday.

 
 
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Moneycontrol Bureau


The tool down strike at Mahindra & Mahindra's automotive plant at Nashik in Maharashtra, which began on Tuesday, has ended, the utility vehicle maker said on Thursday.


Workers at the plant had gone on strike following differences over wage negotiations and suspension of few workers.


M&M said it has struck an agreement with workers at the Nashik plant. It has withdrawn suspension of two workers and the management and union will finalise salary by April 15, it added.


The company is also continuing negotiations to arrive at a long-term wage deal.


The strike had brought production at the plant to a halt since Tuesday, thus affecting production of its Bolero, Xylo and Scorpio utility vehicles.


Earlier, in a notice to the stock exchanges, M&M had said that there had been a production loss of 500 vehicles. The production loss, however, wouldn't have any immediate impact on sales since it has three weeks stocks in the pipeline.


Analysts too had said the production loss won't have a big impact on the company's earnings if resolved quickly.


"We highlight that M&M carries a 3-4 week inventory in the system, which will soften the impact in event of the strike being limited to less than a month to 1.7 percent of EBIT (earnings before interest, taxes)," Aashiesh Agarwaal and Ashish Poddar of Edelweiss Securities said.


Edelweiss Securities has maintained a "buy" rating on M&M with a target price of Rs 1,027.

M&M shares closed up 0.9 percent at Rs 885.60 on NSE.

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