Accumulate M&M for target of Rs 420: Angel

MUMBAI: According to reports, workers at M&M���s Nashik plant have gone on an indefinite ���tools down��� strike and will dent the company���s revenue by around Rs 25 crore a day. Angel Broking is bullish on the stock and keeping in mind the company���s prospects has recommended Accumulate call on the scrip with a price target of Rs 420.

���Workers at Mahindra & Mahindra���s (M&M) largest plant, at Nashik, have gone on an indefinite ���tools down��� strike, denting the company���s revenue by Rs 25 crore a day, says Business Standard report. The plant produces utility vehicles like Scorpio, Bolero and Xylo, as well as Logan, the sedan produced in collaboration with Renault of France. It has 2,750 permanent employees, 1,200 temporary and 500 apprentices. It rolls out 486 vehicles every day.

According to deputy general manager (automotive sector) Uday Kumar Vaidya, the strike, which began Tuesday afternoon, has already caused a loss in production worth Rs 25 crore. The workers at Nashik are protesting against the suspension of their union president, Madhav Dhatrak.

They also allege that the company has been sitting for 22 months on a new salary agreement with workers. A statement from M&M said: ���The management is in dialogue with the union and the workmen to resolve this impasse and the company is hopeful that wiser counsel shall prevail upon the union as well the workmen so that normalcy is restored at the earliest and the loss of production made good soon.���

Keeping in mind the company���s prospects beyond FY2010, we recommend an Accumulate on the stock with target price of Rs 420,��� the report said.