Detailed Project Report
Piston Ring Machining
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹11.50 L
- Term loan from bank
- ₹7.47 L
- Promoter’s contribution
- ₹1.15 L
- Subsidy
- ₹2.87 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-4.99 L
- Average DSCR
- -2.13
- 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
Machine cast-iron blanks into piston rings for engines, compressors and pumps.
| Main product or service | Piston Ring Machining |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Automobile spare-parts dealers
- Engine and compressor repair workshops
- Pump and compressor makers
- Spare-parts wholesalers
- Direct supply to workshops and manufacturers
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Lathe, 1,800 mm bed, 3 HP motor | 1 | 4,50,000 | 4,50,000 |
| Lathe, 900 mm bed, 2 HP motor | 1 | 3,50,000 | 3,50,000 |
| Face grinder with special attachment, 4 HP | 1 | 85,000 | 85,000 |
| Bench drill, 12 mm | 1 | 25,000 | 25,000 |
| Bench grinder, 250 mm wheel, 1 HP | 1 | 25,000 | 25,000 |
| Gauges, tools and other equipment (× 1 lot) | 1 | 60,000 | 60,000 |
| Installation and electrification | 1 | 1,00,000 | 1,00,000 |
| Total | 10,95,000 |
Pre-filled from: PMEGP sample project report — Piston Ring (prepared by Udyami/Samadhan); World Customs Organization – HS Nomenclature 2022, Chapter 84. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Cast-iron piston-ring castings (blanks) — 15,600 kg a year at ₹60 a kg; bought from local foundries
- Coating materials (chrome, phosphate, tin, molybdenum etc.) — surface treatments listed in the report
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 10.95 |
| Contingency | 0.55 |
| Total fixed capital | 11.50 |
| Working capital margin | 0.00 |
| Total project cost | 11.50 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 1.15 | 10.0 |
| Subsidy | 2.87 | 25.0 |
| Term loan from bank | 7.47 | 65.0 |
| Total | 11.50 | 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 | 0.23 | 0.23 | 0.23 | 0.23 | 0.23 | 0.23 | 0.23 |
| Insurance | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 |
| Total cost of operations | 3.17 | 3.17 | 3.17 | 3.17 | 3.17 | 3.17 | 3.17 |
| Operating profit (EBITDA) | -3.17 | -3.17 | -3.17 | -3.17 | -3.17 | -3.17 | -3.17 |
| Depreciation | 1.72 | 1.47 | 1.25 | 1.06 | 0.90 | 0.77 | 0.65 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 0.81 | 0.70 | 0.57 | 0.45 | 0.32 | 0.19 | 0.07 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -5.70 | -5.33 | -4.99 | -4.67 | -4.39 | -4.13 | -3.89 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -5.70 | -5.33 | -4.99 | -4.67 | -4.39 | -4.13 | -3.89 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -5.70 | -5.33 | -4.99 | -4.67 | -4.39 | -4.13 | -3.89 |
| Depreciation | 1.72 | 1.47 | 1.25 | 1.06 | 0.90 | 0.77 | 0.65 |
| Cash accruals (PAT + depreciation) | -3.98 | -3.87 | -3.74 | -3.62 | -3.49 | -3.36 | -3.24 |
| Term loan repaid | 0.57 | 1.15 | 1.15 | 1.15 | 1.15 | 1.15 | 1.15 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -4.55 | -5.02 | -4.89 | -4.77 | -4.64 | -4.51 | -4.39 |
| Cash and bank | -4.55 | -9.57 | -14.46 | -19.23 | -23.86 | -28.38 | -32.76 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 4.02 | 4.02 | 4.02 | 4.02 | 4.02 | 4.02 | 4.02 |
| Reserves and surplus | -5.70 | -11.04 | -16.02 | -20.70 | -25.09 | -29.21 | -33.10 |
| Term loan outstanding | 6.90 | 5.75 | 4.60 | 3.45 | 2.30 | 1.15 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 5.22 | -1.26 | -7.40 | -13.22 | -18.76 | -24.04 | -29.08 |
| Net fixed assets | 9.77 | 8.31 | 7.06 | 6.00 | 5.10 | 4.34 | 3.69 |
| 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 | -4.55 | -9.57 | -14.46 | -19.23 | -23.86 | -28.38 | -32.76 |
| Total assets | 5.22 | -1.26 | -7.40 | -13.22 | -18.76 | -24.04 | -29.08 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -2.29 | -1.71 | -1.84 | -1.98 | -2.15 | -2.36 | -2.60 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -2.13 |
|---|---|
| Lowest DSCR | -2.60 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 1.72 | 1.47 | 1.25 | 1.06 | 0.90 | 0.77 | 0.65 |
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 | 7.47 | 0.81 | 0.57 | 6.90 |
| 2 | 6.90 | 0.70 | 1.15 | 5.75 |
| 3 | 5.75 | 0.57 | 1.15 | 4.60 |
| 4 | 4.60 | 0.45 | 1.15 | 3.45 |
| 5 | 3.45 | 0.32 | 1.15 | 2.30 |
| 6 | 2.30 | 0.19 | 1.15 | 1.15 |
| 7 | 1.15 | 0.07 | 1.15 | 0.00 |
17 Licences and registrations
- Udyam
- GST
- NOC from the State Pollution Control Board (report)
- Standards: IS 5791 and IS 8422 for IC-engine rings (report)
18 Government schemes that may apply
- Prime Minister's Employment Generation Programme (PMEGP)
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- PMEGP sample project report — Piston Ring (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/Piston_Ring_%28_Samadhan_Projects_%29.pdf
- World Customs Organization – HS Nomenclature 2022, Chapter 84 — https://www.wcoomd.org/-/media/wco/public/global/pdf/topics/nomenclature/instruments-and-tools/hs-nomenclature-2022/2022/1684_2022e.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.