On the bourses, MICO has reversed a major downtrend, although it is yet to see a substantial rise. From its mid-February level of Rs 4445, the stock shed 24 per cent to quote at Rs 3350 in mid-March. Since then, the scrip has risen to the Rs 3600-level. The outlook for the scrip is bright provided the market sentiment is not dampened further by the political wranglings at the Centre. Despite a good network and anear monopoly position, MICO is quoting near its 52-week low of Rs 3210 primarily because of the sluggish auto industry.

For the year ended December 1998, MICO saw a marginal drop in turnover from Rs 1373.22 crore to Rs 1298.16 crore. Net profit, however, fell sharply by 28 per cent -- from 67.50 crore to Rs 48.53 crore. However, unlike most other companies in the sector which registered losses during the period, MICO managed to stay in the black primarily because of its good distribution network. A subsidiary of Germany-based Robert Bosch, MICO has an 85 per cent share of the spark plug market and an 80 per cent share in the diesel fuel injection pumps sector.

MICO has a vast distribution network, with 1,400 recognised dealer outlets which has helped it to remain ahead of its competitors. The company has two manufacturing units at Bangalore and one at Nashik. On a net profit of Rs 48.53 crore, the earning per share works out to Rs 127, which gives a discounting of 28. Apart from a bad year for theauto industry, lack of liquidity in the counter could affect the MICO scrip. The company has a low floating stock of 38 lakh shares of Rs 100 each. While the German company holds 51 per cent stake, domestic institutions have a 25 per cent stake. The public shareholding is only 11 per cent.