The company manufactures dash board, oil guage, oil pumps, speedometer etc and has good exposure in all segments of the auto ancillary industry. Its products are predominantly for cars, jeeps and two-wheelers. About 75 per cent of its sales is to the original equipment manufacturers (OEM) market, while the rest is in the replacement market. Precol has a technological tie-up with Denso Corporation of Japan which has taken an equity stake in the company.

The recent spurt in interest is said to be on account of the company's new product `idle speed control valve'. This is one of the few components that go into the production of fuel injection system. Denso Corporation which isalready in the process of setting up a fuel injection system unit to cater to the requirements of Maruti Suzuki will be sourcing the valve from Precol.

The recent Supreme Court order on Euro norms has created a situation wherein all petrol vehicles will have to fitted with fuel injection systems in the next few years to comply with the emission norms.

Maruti, which is unable to sell its vehicles in the national capital region (NCR) is reported to be pressurising Denso to commence the unit ahead of schedule. By this, they can source fuel injection systems from them and put its vehicles on road in NCR where its market share is about 30 per cent. These should have a positive impact on Precol's bottomline.

Another reason for the interest is the 40 million yen loan extended to the company by Denso. The loan agreement has a provision for converting the debt into equity at the option of Denso for a price not less than Rs 200 per share. The high conversion price vis-a-vis the current market price of Rs 129 isbeing read by the market as a indicator of good performance by the company.