Detailed Project Report
Magnesium Stearate
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹9.29 L
- Term loan from bank
- ₹6.04 L
- Promoter’s contribution
- ₹0.93 L
- Subsidy
- ₹2.32 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-4.58 L
- Average DSCR
- -2.59
- 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
React stearic acid salts with magnesium chloride to make a white powder used by pharma, paint and plastics makers.
| Main product or service | Magnesium Stearate |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Pharmaceutical tablet and capsule makers
- Paint, varnish and cement-paint makers
- PVC pipe and compound makers
- Rubber, cosmetics, soap and toothpaste makers
- Direct B2B supply after sample approval
- Chemical traders and distributors
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| SS reaction vessel, cylindrical, 1,500 litre | 1 | 1,00,000 | 1,00,000 |
| SS rectangular tanks with conical bottom and outlet valve, 500 kg (× 3) | 1 | 1,50,000 | 1,50,000 |
| Filter press, plate and frame 18" × 18" (24 plates) | 1 | 60,000 | 60,000 |
| Drier, 100 trays with heating and exhaust fan (× 2) | 1 | 2,50,000 | 2,50,000 |
| Boiler 100 psi, 100 kg/hr | 1 | 1,20,000 | 1,20,000 |
| Misc. equipment: portable stirrer, centrifugal pump, pulveriser, weighing balance (× 1 lot) | 1 | 1,00,000 | 1,00,000 |
| Laboratory equipment (× 1 lot) | 1 | 25,000 | 25,000 |
| Installation (10% of plant and machinery) | 1 | 80,000 | 80,000 |
| Total | 8,85,000 |
Pre-filled from: PMEGP sample project report — Magnesium Stearate (prepared by Udyami/Samadhan); DGFT – ITC(HS) Classification of Export and Import Items. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Stearic acid — 160 MT a year at ₹45,000 per MT at full capacity
- Soda ash — 33 MT at ₹18,000 per MT
- Magnesium chloride — 26 MT at ₹8,000 per MT
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 8.85 |
| Contingency | 0.44 |
| Total fixed capital | 9.29 |
| Working capital margin | 0.00 |
| Total project cost | 9.29 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 0.93 | 10.0 |
| Subsidy | 2.32 | 25.0 |
| Term loan from bank | 6.04 | 65.0 |
| Total | 9.29 | 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 | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 |
| Insurance | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 |
| Total cost of operations | 3.11 | 3.11 | 3.11 | 3.11 | 3.11 | 3.11 | 3.11 |
| Operating profit (EBITDA) | -3.11 | -3.11 | -3.11 | -3.11 | -3.11 | -3.11 | -3.11 |
| Depreciation | 1.39 | 1.18 | 1.01 | 0.86 | 0.73 | 0.62 | 0.53 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 0.65 | 0.57 | 0.46 | 0.36 | 0.26 | 0.16 | 0.06 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -5.16 | -4.86 | -4.58 | -4.33 | -4.10 | -3.89 | -3.69 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -5.16 | -4.86 | -4.58 | -4.33 | -4.10 | -3.89 | -3.69 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -5.16 | -4.86 | -4.58 | -4.33 | -4.10 | -3.89 | -3.69 |
| Depreciation | 1.39 | 1.18 | 1.01 | 0.86 | 0.73 | 0.62 | 0.53 |
| Cash accruals (PAT + depreciation) | -3.77 | -3.68 | -3.58 | -3.47 | -3.37 | -3.27 | -3.17 |
| Term loan repaid | 0.46 | 0.93 | 0.93 | 0.93 | 0.93 | 0.93 | 0.93 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -4.23 | -4.61 | -4.51 | -4.40 | -4.30 | -4.20 | -4.10 |
| Cash and bank | -4.23 | -8.84 | -13.34 | -17.75 | -22.05 | -26.25 | -30.35 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 3.25 | 3.25 | 3.25 | 3.25 | 3.25 | 3.25 | 3.25 |
| Reserves and surplus | -5.16 | -10.02 | -14.61 | -18.94 | -23.04 | -26.93 | -30.62 |
| Term loan outstanding | 5.58 | 4.65 | 3.72 | 2.79 | 1.86 | 0.93 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 3.67 | -2.12 | -7.64 | -12.90 | -17.93 | -22.74 | -27.37 |
| Net fixed assets | 7.90 | 6.71 | 5.71 | 4.85 | 4.12 | 3.50 | 2.98 |
| 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 | -4.23 | -8.84 | -13.34 | -17.75 | -22.05 | -26.25 | -30.35 |
| Total assets | 3.67 | -2.12 | -7.64 | -12.90 | -17.93 | -22.74 | -27.37 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -2.78 | -2.08 | -2.23 | -2.41 | -2.62 | -2.86 | -3.16 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -2.59 |
|---|---|
| Lowest DSCR | -3.16 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 1.39 | 1.18 | 1.01 | 0.86 | 0.73 | 0.62 | 0.53 |
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 | 6.04 | 0.65 | 0.46 | 5.58 |
| 2 | 5.58 | 0.57 | 0.93 | 4.65 |
| 3 | 4.65 | 0.46 | 0.93 | 3.72 |
| 4 | 3.72 | 0.36 | 0.93 | 2.79 |
| 5 | 2.79 | 0.26 | 0.93 | 1.86 |
| 6 | 1.86 | 0.16 | 0.93 | 0.93 |
| 7 | 0.93 | 0.06 | 0.93 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST
- State Pollution Control Board consent
- Boiler registration and inspection under the Boilers Act (100 psi boiler)
- Fire NOC
18 Government schemes that may apply
- Prime Minister's Employment Generation Programme (PMEGP)
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- Stand-Up India
19 Sources
- PMEGP sample project report — Magnesium Stearate (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/Magnesium_Stearate_%28_Samadhan_Projects_%29.pdf
- DGFT – ITC(HS) Classification of Export and Import Items — https://www.dgft.gov.in/CP/?opt=itchs-import-export
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.