Detailed Project Report
Steel Forgings (Hammer Forging Unit)
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹26.04 L
- Term loan from bank
- ₹23.43 L
- Promoter’s contribution
- ₹2.60 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-8.15 L
- Average DSCR
- -0.76
- 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
Heating cut steel bars in a furnace and hammering them in dies into strong shaped parts for vehicle and machine makers.
| Main product or service | Steel Forgings (Hammer Forging Unit) |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Vehicle and auto part makers
- Machine and engineering goods makers
- Defence and aerospace suppliers
- Machine shops that finish forged blanks
- Job orders against customer drawings
- Approved-vendor supply to manufacturers
- Sub-contract work for larger forge shops
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Heavy duty centre lathe with 3 HP motor | 1 | 1,10,000 | 1,10,000 |
| Double ended pedestal grinder, 2 HP | 1 | 11,600 | 11,600 |
| High speed shaping machine, 630 mm stroke, 3 HP | 1 | 1,15,000 | 1,15,000 |
| Electric normalising furnace, 1500 mm × 600 mm | 1 | 1,70,000 | 1,70,000 |
| Oil fired pre-heating furnace with burners, blowers and oil tank | 1 | 1,75,000 | 1,75,000 |
| Pillar drill machine, 1 HP | 1 | 12,000 | 12,000 |
| Platform weighing machine, 500 kg | 1 | 12,000 | 12,000 |
| Pneumatic power hammer, 500 kg, with 33 HP motor | 1 | 5,40,000 | 5,40,000 |
| Power hacksaw, 1 HP | 1 | 30,000 | 30,000 |
| Rockwell hardness tester | 1 | 40,000 | 40,000 |
| Friction drop hammer, 500 kg, with 25 HP motor | 1 | 4,00,000 | 4,00,000 |
| Shot blasting chamber with 7.5 HP motor | 1 | 3,60,000 | 3,60,000 |
| Tools, dies and equipment | 1 | 1,50,000 | 1,50,000 |
| Trimming power press, 60 tonnes, with 5 HP motor | 1 | 1,75,000 | 1,75,000 |
| Installation and electrification | 1 | 1,79,000 | 1,79,000 |
| Total | 24,79,600 |
Pre-filled from: DC-MSME project profile — Steel Forgings. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Forging quality steel ingots or rods to the customer's specification — 60 MT a month at ₹19,000 per MT (2003)
- Die steel and MS plates — ₹58,000 a month
- Furnace oil — for the pre-heating furnace; the profile prints no separate cost
- Lubricating oil, cotton waste and packing material — ₹9,000 a month
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 24.80 |
| Contingency | 1.24 |
| Total fixed capital | 26.04 |
| Working capital margin | 0.00 |
| Total project cost | 26.04 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 2.60 | 10.0 |
| Term loan from bank | 23.43 | 90.0 |
| Total | 26.04 | 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 | 0.52 | 0.52 | 0.52 | 0.52 | 0.52 | 0.52 | 0.52 |
| Insurance | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 |
| Total cost of operations | 3.53 | 3.53 | 3.53 | 3.53 | 3.53 | 3.53 | 3.53 |
| Operating profit (EBITDA) | -3.53 | -3.53 | -3.53 | -3.53 | -3.53 | -3.53 | -3.53 |
| Depreciation | 3.91 | 3.32 | 2.82 | 2.40 | 2.04 | 1.73 | 1.47 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 2.54 | 2.20 | 1.80 | 1.40 | 1.01 | 0.61 | 0.21 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -9.97 | -9.05 | -8.15 | -7.33 | -6.58 | -5.88 | -5.22 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -9.97 | -9.05 | -8.15 | -7.33 | -6.58 | -5.88 | -5.22 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -9.97 | -9.05 | -8.15 | -7.33 | -6.58 | -5.88 | -5.22 |
| Depreciation | 3.91 | 3.32 | 2.82 | 2.40 | 2.04 | 1.73 | 1.47 |
| Cash accruals (PAT + depreciation) | -6.07 | -5.73 | -5.33 | -4.94 | -4.54 | -4.14 | -3.75 |
| Term loan repaid | 1.80 | 3.60 | 3.60 | 3.60 | 3.60 | 3.60 | 3.60 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -7.87 | -9.33 | -8.94 | -8.54 | -8.14 | -7.75 | -7.35 |
| Cash and bank | -7.87 | -17.20 | -26.14 | -34.68 | -42.82 | -50.57 | -57.92 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 2.60 | 2.60 | 2.60 | 2.60 | 2.60 | 2.60 | 2.60 |
| Reserves and surplus | -9.97 | -19.02 | -27.17 | -34.51 | -41.09 | -46.96 | -52.18 |
| Term loan outstanding | 21.63 | 18.02 | 14.42 | 10.81 | 7.21 | 3.60 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 14.26 | 1.61 | -10.15 | -21.09 | -31.27 | -40.75 | -49.58 |
| Net fixed assets | 22.13 | 18.81 | 15.99 | 13.59 | 11.55 | 9.82 | 8.35 |
| 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 | -7.87 | -17.20 | -26.14 | -34.68 | -42.82 | -50.57 | -57.92 |
| Total assets | 14.26 | 1.61 | -10.15 | -21.09 | -31.27 | -40.75 | -49.58 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.81 | -0.61 | -0.65 | -0.70 | -0.77 | -0.84 | -0.92 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.76 |
|---|---|
| Lowest DSCR | -0.92 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 3.91 | 3.32 | 2.82 | 2.40 | 2.04 | 1.73 | 1.47 |
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 | 23.43 | 2.54 | 1.80 | 21.63 |
| 2 | 21.63 | 2.20 | 3.60 | 18.02 |
| 3 | 18.02 | 1.80 | 3.60 | 14.42 |
| 4 | 14.42 | 1.40 | 3.60 | 10.81 |
| 5 | 10.81 | 1.01 | 3.60 | 7.21 |
| 6 | 7.21 | 0.61 | 3.60 | 3.60 |
| 7 | 3.60 | 0.21 | 3.60 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- Factory licence
- State Pollution Control Board consent (the profile requires an NOC)
- Licence to store furnace oil where the quantity needs it
- BIS certification where a Quality Control Order applies
18 Government schemes that may apply
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- DC-MSME project profile — Steel Forgings — https://www.dcmsme.gov.in/publications/pmryprof/meatllurgical/ch24.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.