Detailed Project Report
Agarbatti (Incense Stick) Making
—
Prepared on: 29 October 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹5.99 L
- Term loan from bank
- ₹3.89 L
- Promoter’s contribution
- ₹0.60 L
- Subsidy
- ₹1.50 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-3.98 L
- Average DSCR
- -3.92
- Break-even (% of capacity used)
- —
02 Promoter and unit
| Promoter name | — |
|---|---|
| Business / firm name | — |
| Legal form | Proprietorship |
| Address of the unit | — |
| Applicant category | General · Rural |
03 The project
Make masala agarbatti and dhoop with automatic machines, then perfume and pack them.
| Main product or service | Agarbatti (Incense Stick) Making |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Households
- Temples and religious functions
- Exporters
- Resellers and wholesalers
- Own brand through retail shops
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| High-speed automatic agarbatti making machine | 1 | 1,45,000 | 1,45,000 |
| Automatic dhoopbatti making machine (× 2) | 1 | 2,70,000 | 2,70,000 |
| Powder mixing machine | 1 | 30,000 | 30,000 |
| Other accessories and tools | 1 | 31,000 | 31,000 |
| Packing, GST etc. | 1 | 94,000 | 94,000 |
| Total | 5,70,000 |
Pre-filled from: PMEGP sample project report — Incense Sticks (Agarbatti) Manufacturing (prepared by Udyami/Samadhan). Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- White chips — about 40% of a typical masala mix
- Gigatu — about 20%
- Charcoal powder — about 20%
- Aromatic chemicals and essential oils — about 20%; perfume diluted 1:3 with white oil or diethyl phthalate
- Bamboo sticks — all raw material costed at ₹40 per kg of agarbatti
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 5.70 |
| Contingency | 0.29 |
| Total fixed capital | 5.99 |
| Working capital margin | 0.00 |
| Total project cost | 5.99 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 0.60 | 10.0 |
| Subsidy | 1.50 | 25.0 |
| Term loan from bank | 3.89 | 65.0 |
| Total | 5.99 | 100.0 |
| Working capital loan (outside project cost) | 0.00 |
09 Key assumptions
| Selling price | ₹0 per units |
|---|---|
| Raw material & packing cost | ₹0 per units |
| Capacity used each year | 60% · 70% · 80% · 80% · 80% · 80% · 80% |
| Term loan interest rate (% a year) | 11% · 84 months (Moratorium 6) |
| Working capital method | Turnover method (RBI) · Working capital interest (% a year) 11% |
| Income tax rate | 25% |
| Yearly price and cost rise | 0% |
10 Production and sales
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capacity used | 60% | 70% | 80% | 80% | 80% | 80% | 80% |
| Production (units) | 6,000 | 7,000 | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 |
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
11 Projected profitability
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Raw material and packing | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Power and fuel | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Salaries and wages | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 |
| Rent | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Administration | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Selling and distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Repairs and maintenance | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 |
| Insurance | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 |
| Total cost of operations | 3.03 | 3.03 | 3.03 | 3.03 | 3.03 | 3.03 | 3.03 |
| Operating profit (EBITDA) | -3.03 | -3.03 | -3.03 | -3.03 | -3.03 | -3.03 | -3.03 |
| Depreciation | 0.90 | 0.76 | 0.65 | 0.55 | 0.47 | 0.40 | 0.34 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 0.42 | 0.36 | 0.30 | 0.23 | 0.17 | 0.10 | 0.04 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -4.35 | -4.16 | -3.98 | -3.81 | -3.67 | -3.53 | -3.40 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -4.35 | -4.16 | -3.98 | -3.81 | -3.67 | -3.53 | -3.40 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -4.35 | -4.16 | -3.98 | -3.81 | -3.67 | -3.53 | -3.40 |
| Depreciation | 0.90 | 0.76 | 0.65 | 0.55 | 0.47 | 0.40 | 0.34 |
| Cash accruals (PAT + depreciation) | -3.45 | -3.39 | -3.33 | -3.26 | -3.20 | -3.13 | -3.07 |
| Term loan repaid | 0.30 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 | 0.60 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -3.75 | -3.99 | -3.93 | -3.86 | -3.80 | -3.73 | -3.66 |
| Cash and bank | -3.75 | -7.74 | -11.67 | -15.53 | -19.33 | -23.06 | -26.72 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 2.09 | 2.09 | 2.09 | 2.09 | 2.09 | 2.09 | 2.09 |
| Reserves and surplus | -4.35 | -8.51 | -12.48 | -16.30 | -19.96 | -23.49 | -26.90 |
| Term loan outstanding | 3.59 | 2.99 | 2.39 | 1.80 | 1.20 | 0.60 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 1.34 | -3.42 | -7.99 | -12.41 | -16.67 | -20.80 | -24.80 |
| Net fixed assets | 5.09 | 4.32 | 3.68 | 3.12 | 2.66 | 2.26 | 1.92 |
| Preliminary expenses not written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current assets (stock and debtors) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Cash and bank | -3.75 | -7.74 | -11.67 | -15.53 | -19.33 | -23.06 | -26.72 |
| Total assets | 1.34 | -3.42 | -7.99 | -12.41 | -16.67 | -20.80 | -24.80 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -4.21 | -3.14 | -3.38 | -3.64 | -3.96 | -4.33 | -4.78 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -3.92 |
|---|---|
| Lowest DSCR | -4.78 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 0.90 | 0.76 | 0.65 | 0.55 | 0.47 | 0.40 | 0.34 |
Written-down value method at Income-tax Rules block rates (building 10%, plant & machinery 15%, furniture 10%, computers 40%). Change them if your CA uses other rates.
16 Term loan repayment
| Year | Opening | Interest | Term loan repaid | Closing |
|---|---|---|---|---|
| 1 | 3.89 | 0.42 | 0.30 | 3.59 |
| 2 | 3.59 | 0.36 | 0.60 | 2.99 |
| 3 | 2.99 | 0.30 | 0.60 | 2.39 |
| 4 | 2.39 | 0.23 | 0.60 | 1.80 |
| 5 | 1.80 | 0.17 | 0.60 | 1.20 |
| 6 | 1.20 | 0.10 | 0.60 | 0.60 |
| 7 | 0.60 | 0.04 | 0.60 | 0.00 |
17 Licences and registrations
- Udyam
- GST
- Trade licence
- Legal Metrology registration for packaged goods
- Trademark for your brand (optional)
18 Government schemes that may apply
- Prime Minister's Employment Generation Programme (PMEGP)
- Pradhan Mantri MUDRA Yojana (PMMY) – Shishu, Kishor, Tarun, Tarun Plus
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- PMEGP sample project report — Incense Sticks (Agarbatti) Manufacturing (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/Agarbatti_%28_Samadhan_Projects_%29.pdf
This report is a projection from the figures entered by the promoter. It is not a bank appraisal or a guarantee of a loan or subsidy. Check every figure with current quotations and your chartered accountant before submitting it.