He's referring to wheel horsepower, not flywheel horsepower. Typically OBD2 E36 M3s put down about 210 horsepower at the rear wheels, so he is looking for an additional 40 rear wheel horsepower.
Many people have had success with the Eurosport Schrick Cam Kit. If you want to hit that number and stay normally aspirated, you will likely end up using most of these parts so I suggest just buying it together:
Eurosport Catalog Of course it can be done cheaper than this, but this is complete, and many people can attest to the performance.
