During talks, Piaggio hassaid that it needs to look into the PSU deeply and find what which areas/activities would gel with their line of business, sources said. Piaggio has to study the proposal keeping in mind its existing tie-up with Greaves for the manufacture of three wheelers. The due diligence of the company would be done later.

Sources said that talks with other companies are at an initial stage. Other companies had shown an interest in other businesses of SIL including two-wheelers.

The company recently announced its results for the year ended March 31, 1998. SIL's turnover increased to Rs 131.3 crore from Rs 125.7 crore. It recorded a net profit of Rs 12.7 crore, a growth of 20 per cent, as compared with the previous year. The company's net profit stood at Rs 10.6 crore in 1996-97. The performance of the company improved on account of reduction in material consumption as well as in power and fuel costs. Consequent to the sanctioned revival scheme proposed by BIFR, the company surpassed the target set by the board.Company officials pointed out that the next two years will be vital for the company's performance as it has to find new products and diversify its operations. According to the AIAM figures, the company sold 866 three wheelers in May as against a production of 1,200 units during the same month. This is lower than the sales of 1,304 recorded in the corresponding month the previous year.