Detailed Project Report
Surgical Absorbent Cotton (Cotton Wool)
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹36.59 L
- Term loan from bank
- ₹32.93 L
- Promoter’s contribution
- ₹3.66 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-10.29 L
- Average DSCR
- -0.58
- 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
Boil, bleach, card and roll raw cotton into absorbent cotton for hospitals, chemists and first-aid use.
| Main product or service | Surgical Absorbent Cotton (Cotton Wool) |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Government hospitals (largest buyers, profile)
- Private hospitals, nursing homes and dispensaries
- Chemists and households for first aid
- Sanitary-pad makers and beauty parlours
- Hospital and government tenders
- Medical and surgical distributors
- Chemist shops
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| High-pressure kier (MS, epoxy-lined), 2,000 kg cotton per charge, with pump | 1 | 1,70,000 | 1,70,000 |
| Revolving-flat carding machine, 1,016 mm (× 2) | 1 | 7,50,000 | 7,50,000 |
| Two-compartment continuous steam dryer (× 2) | 1 | 6,60,000 | 6,60,000 |
| Single scutcher and lap machine, 1,065 mm, 10 HP (× 2) | 1 | 6,50,000 | 6,50,000 |
| Porcupine cleaner, 1,200 mm, 5 HP (× 2) | 1 | 2,50,000 | 2,50,000 |
| Coal/wood-fired boiler, 1,000 kg/hour | 1 | 1,95,000 | 1,95,000 |
| Vertical opener, 5 HP | 1 | 1,00,000 | 1,00,000 |
| Centrifugal hydro-extractor, SS basket 1,000 mm | 1 | 90,000 | 90,000 |
| Water treatment plant for boiler and kier (× lump sum) | 1 | 85,000 | 85,000 |
| Overhead water tank 10,000 litres and tube well (× lump sum) | 1 | 80,000 | 80,000 |
| Rolling and winding machine, 1,320 mm (× 2) | 1 | 60,000 | 60,000 |
| Wet cotton opener, 1,000 mm | 1 | 48,000 | 48,000 |
| Washing tanks and insulated piping (× lump sum) | 1 | 47,000 | 47,000 |
| Testing equipment (pH meter, Soxhlet extractor, balance, furnace, oven) (× 1 set) | 1 | 1,20,000 | 1,20,000 |
| Pollution-control and energy-saving equipment (× lump sum) | 1 | 1,50,000 | 1,50,000 |
| Band-saw roll cutter (× 2) | 1 | 17,000 | 17,000 |
| Air compressor for lapping machine | 1 | 13,000 | 13,000 |
| Total | 34,85,000 |
Pre-filled from: MSME-DI Hyderabad project profile — Surgical Absorbent Cotton; World Customs Organization – HS Nomenclature 2022, Chapter 30. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Raw ginned cotton — 27,500 kg a month at ₹32 a kg; the profile says cotton from North India is preferred
- Caustic soda — 850 kg a month at ₹18 a kg
- Soda ash — 550 kg a month at ₹11 a kg
- Bleaching agent — 550 kg a month at ₹6.50 a kg
- Coal for the boiler — 45 tonnes a month at ₹1,800 a tonne
- Packing paper, labels, gum, polythene and sacks — ₹50,000 a month
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 34.85 |
| Contingency | 1.74 |
| Total fixed capital | 36.59 |
| Working capital margin | 0.00 |
| Total project cost | 36.59 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 3.66 | 10.0 |
| Term loan from bank | 32.93 | 90.0 |
| Total | 36.59 | 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 | 0.73 | 0.73 | 0.73 | 0.73 | 0.73 | 0.73 | 0.73 |
| Insurance | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 |
| Total cost of operations | 3.79 | 3.79 | 3.79 | 3.79 | 3.79 | 3.79 | 3.79 |
| Operating profit (EBITDA) | -3.79 | -3.79 | -3.79 | -3.79 | -3.79 | -3.79 | -3.79 |
| Depreciation | 5.49 | 4.67 | 3.97 | 3.37 | 2.87 | 2.44 | 2.07 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 3.56 | 3.09 | 2.53 | 1.97 | 1.42 | 0.86 | 0.30 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -12.85 | -11.55 | -10.29 | -9.14 | -8.08 | -7.09 | -6.17 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -12.85 | -11.55 | -10.29 | -9.14 | -8.08 | -7.09 | -6.17 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -12.85 | -11.55 | -10.29 | -9.14 | -8.08 | -7.09 | -6.17 |
| Depreciation | 5.49 | 4.67 | 3.97 | 3.37 | 2.87 | 2.44 | 2.07 |
| Cash accruals (PAT + depreciation) | -7.36 | -6.88 | -6.33 | -5.77 | -5.21 | -4.65 | -4.10 |
| Term loan repaid | 2.53 | 5.07 | 5.07 | 5.07 | 5.07 | 5.07 | 5.07 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -9.89 | -11.95 | -11.39 | -10.84 | -10.28 | -9.72 | -9.16 |
| Cash and bank | -9.89 | -21.84 | -33.24 | -44.07 | -54.35 | -64.07 | -73.23 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 3.66 | 3.66 | 3.66 | 3.66 | 3.66 | 3.66 | 3.66 |
| Reserves and surplus | -12.85 | -24.40 | -34.69 | -43.83 | -51.91 | -58.99 | -65.16 |
| Term loan outstanding | 30.40 | 25.33 | 20.27 | 15.20 | 10.13 | 5.07 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 21.21 | 4.60 | -10.76 | -24.97 | -38.11 | -50.27 | -61.50 |
| Net fixed assets | 31.10 | 26.44 | 22.47 | 19.10 | 16.24 | 13.80 | 11.73 |
| 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 | -9.89 | -21.84 | -33.24 | -44.07 | -54.35 | -64.07 | -73.23 |
| Total assets | 21.21 | 4.60 | -10.76 | -24.97 | -38.11 | -50.27 | -61.50 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.62 | -0.47 | -0.50 | -0.54 | -0.59 | -0.64 | -0.71 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.58 |
|---|---|
| Lowest DSCR | -0.71 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 5.49 | 4.67 | 3.97 | 3.37 | 2.87 | 2.44 | 2.07 |
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 | 32.93 | 3.56 | 2.53 | 30.40 |
| 2 | 30.40 | 3.09 | 5.07 | 25.33 |
| 3 | 25.33 | 2.53 | 5.07 | 20.27 |
| 4 | 20.27 | 1.97 | 5.07 | 15.20 |
| 5 | 15.20 | 1.42 | 5.07 | 10.13 |
| 6 | 10.13 | 0.86 | 5.07 | 5.07 |
| 7 | 5.07 | 0.30 | 5.07 | 0.00 |
17 Licences and registrations
- Manufacturing licence from the State Drugs Controller (the profile says the product is covered by drug-control law)
- State Pollution Control Board consent (effluent treatment)
- Boiler registration under the Boilers Act
- Factory licence
- Udyam
- GST
18 Government schemes that may apply
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- Stand-Up India
19 Sources
- MSME-DI Hyderabad project profile — Surgical Absorbent Cotton — https://msmedihyderabad.gov.in/documents/report/80b3ae5659655f19e0e5f3b970ae5ad3.pdf
- World Customs Organization – HS Nomenclature 2022, Chapter 30 — https://www.wcoomd.org/-/media/wco/public/global/pdf/topics/nomenclature/instruments-and-tools/hs-nomenclature-2022/2022/0630_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.