Shudh Dairy U109060, U109065, U109073, U109084, U109055

8/8/2019 Shudh Dairy U109060, U109065, U109073, U109084, U109055

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Shudh Dairy ProjectPROJECT APPRAISAL ASSIGNMENT

By,

Anuradha Mohanta (U109055)

Batala Mayuri (U109060)

Ekta Agarwal (U109065)

Manisha Tripathy (U109073)

Ruchira Vats (U109084)


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ROAD SO FAR....

Study of prospective projectsStudy of the various prospective industry and projects was carried out for

better selection.

Sector SelectionAfter studying the various possible projects, we finalised upon the dairy sector

due to following main reasons:

o Not many private players in Orissa Dairy farm industryo Growing sectoro High potential market that can be tapped in

Major players studyPost selection of the sector we studied the major Indian industry players. This

helped us getting an idea of the project and kick starting the project.

Requirement StudyRequirement study helped us in getting a basic idea on how to start and

implement the project. It also gave us an idea of the various resources, input, capital

needed, and finances available for the project.

Information GatheringData gathering about the various kinds of requirements needed for the

project. It gave an insight into quantity and price aspects of the requirements

collected.

AssumptionsWherever information of the requirements wasnt available assumptions

were made for proceeding with the financial analysis. In certain cases as Tax the

assumptions were aimed at making the calculations simpler.

Financial Calculation and AnalysisThe calculation involved the project cost estimation, sales/revenue projections,

balance sheet projection etc. Based on these calculation analysis was done using the

various tools like sensitivity analysis, BE Analysis.

Report Preparation


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INTODUCTION

Today, India can be termed as 'The Oyster' of the international dairy industry. Being

the worlds largest and fastest growing dairy market; both milk and milk products market; it

provides huge opportunity for investment and capitalizing to entrepreneurs from all over

the world. This opportunity is synonymous to a bagful of 'pearls' awaiting investment. The

Indian dairy industry can be one of the many profitable options available for investors

expanding their overseas operations to India. The international players have many options

of starting up in India which include technology transfer, joint ventures or using India for

sourcing the regional exports. It is also one of the promising areas of investment for aspiring

Indian Entrepreneurs in search for an appropriate area of investment.

With the liberalization of the Indian economy, there is scope for investment for both

MNC's and foreign investors. In this aspect dairy sector provides a good opportunity for

those looking for new and expanding markets. While the farming sector has been more or

less stagnant, the dairy sector has seen much activity.

Our project would aid in meeting the demand-supply gap existing in the Indian

economy in the dairy product market. These kinds of projects help in organizing the industry

and give this sector a distinct advantage. This project has a much easier marketing prospect

of the end product as compared to other businesses.

PRE-FEASIBILITY STUDY

INPUT:

Cooperatives assure the farmer of not only a market for their product but also take

care of logistical issues like transportation and containers. The farmer is spared these costs

as well as the cost of putting up a retail outlet.

Cooperatives allow for stable selling rate which does not change even when they yield is

surplus. Payments are guaranteed to milk producers and ensured within a maximum of 30

days. Cooperatives play an important role by eliminating middlemen and the associated

costs.


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STATE AND CENTRAL GOVERNMENT ROLE:

There are several financial incentives provided by the governments for setting up

infrastructural facilities for milk production. The tenth plan outlay for animal husbandry and

dairying was Rs. 2500 crores.

The National bank for Agricultural and Rural Development (NABARD) assists farmers with

loans and refinancing facilities for dairy farming. The interest rate being charged for dairy

production units ranges from 12% to 13%, depending on the loan amount. Loans are to be

repaid in monthly instalments usually within a period of 5 years.

MARKET:

In the past 15 years, milk production in India has doubled and is now over 100

million tons a year; thus becoming Indias No.1 farm commodity. Milk production in India is

expected to grow at about 3 per cent per annum. However, due to increasing population,

per capita availability of milk is expected to increase by only about 1.5 per cent per annum.

For an economy growing at about 8 per cent per annum, this increase in availability will be

grossly inadequate. Production growing at only 3 per cent and consumption growing at

more than double the rate leads to a mismatch between demand and supply. This creates

opportunities for new entrants to this industry.

OTHER FACTORS:

There are several other factors that make dairy a safe sector to venture into. They are:

The demand for milk and its products is active year round. Demand for Milk isincreasing day by day.

Dairy farming does not need skilled labour, thus reducing costs and makingavailability of labour easy.

Unlike other agricultural sectors, Dairy is not dependant on rains and productiongoes on year round.

Returns on this business are available within a month. Today, virtually no otherbusiness offers such a short gestation period.

Use of by products provides additional income and increases returns. For exampledung can be used to produce biogas for cooking and even as manure and compost.

Veterinary Aid is available at most of the villages in India. There is no direct competition from the foreign counterparts.


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TRAINING:

In India, farmers carry on dairy activity secondary to their main agricultural activity. Also,

dairying is carried on in a traditional manner as was being done by past generations. For

example, the same patterns of feeding and watering are followed as was being done yearsago. Lack of scientific and modern methods, proper training and proper counselling

regarding are some reasons why a dairy might fail. Another reason why a dairy might incur

losses is that the farmer is unaware of the costs incurred and the economics of his day to

day business. Getting some initial professional training would help enhance productivity of

the business. Opportunities for training are available with most of the:

Agricultural/Veterinary Universities of various states Krishi Vigyan Kendras State Department of Animal Husbandry National level organizations like National Dairy Research Institute (NDRI) Karnal

(Haryana) provide training on rearing of dairy animals and manufacture of milk

products.

Alternately training facilities are also available in some non-governmentalorganizations that are active in farming sectors.


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TECHNICAL FEASIBILITY

The proposed dairy plant will be established in Arugul, near Khurda district. The main

criteria for selection of the centre would be Nearness of the selected area to veterinary,

breeding and milk collection centre and the financing bank's branch.

LOCATION:

Since the place will be nearby Khurda junction and NH, so it well connected to

financing branch, i.e. SBI of Khurda, There are plenty of livestock in the nearby areas of

Arugul, so the collection of milk will not be a problem. The owners of livestock will get a

permanent market and they will not have to go to too far off places to sell the milk.

SIZE OF THE PLANT:

The Plant which we will be setting will be large one, with the capacity of 3 lakhs litres

of milk per day. To get the raw material will not be a problem because of the plenty of the

livestock in the nearby area.

SCHEDULE OF IMPLEMENTATION:

The implementation phase of the project will take 6 months. The activities will be

prioritized such that the implementation will be completed in six months. The main prioritywill be given to set up of machinery and the construction of cold storage to start the

production as soon as possible.


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MARKET FEASIBILITY

Dairy market in India is very large and potential growth market. As per estimates the

unorganized milk and milk product market is about Rs 470 billion and the market for

processed organized dairy segment is only Rs 10000 crores. The growth rate of the market is5% pa in volume terms. The exports in dairy industry increased from US$ 210.5 million in

2007-08 to US$ 113.57 last fiscal. The domestic dairy sector is slated to cross US$ 108 billion

in revenues by 2011. India with its diverse population with diverse food habits, cultures,

tradition and religions of more than 1 billion offers a great market for milk and milk

products. Milk products with different quality characteristics can be packaged in attractive

containers and can be marketed at different places. Most milk food delicacies are high profit

generating products. The variety of milk products produced include curd, ghee, khoa,

channa, paneer, shrikhand , milk powder, whitener ,condensed milk, malted milk food, ice

cream and a variety of milk sweets, which are now produced by the organized dairy

industries as well, are major value added products from the Indian dairy sector. Even

market for traditional dairy products in India is estimated to be US $ 10 billion, being the

largest and fastest growing segment of the Indian dairy industry. So we can see that there is

lot of untapped potential which can be cashed in.

Coming to the local market of Orissa there is lot of growth prospects. As such the private

investment has been less in the sector but is on a rise lately. Below are the co-operatives

and dairy plants which are the major part of the Dairy Industry:

Cuttack Dist Coop Milk Producers' Union Ltd, Cuttack Greater Ganjam Gajapati Coop Milk Producers' Union Ltd, Berhampur Dhenkanal Dist Coop Milk Producers' Union Ltd, Dhenkanal Puri Dist Coop Milk Producers' Union Ltd, Bhubaneswar Amrutha Foods & Beverages Ltd Prithviraj Dairy Products Pvt Ltd Vita Products Orissa State Cooperative Milk Producers' Federation Ltd Keonjhar Dist Coop Milk Producers' Union Ltd, Raisuan Sambalpur Dist Coop Milk Producers' Union Ltd, Sambalpur

So there is lot of scope of Growth in the local market itself before moving on to other

regions of the country and outside country. Dairy industry provides a lot of opportunities to

improve rural incomes, nutrition and women empowerment, and hence is a very critical

area for investment. And Orissas rural population being backward compared to other states

offers a lot of growth potential in this respect. Moreover it is easy to avail Government

support in serving and providing employment opportunities to this segment of Population.


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ASSUMPTIONS:

Total production is total sales per day 800 grams of curd is produced from 1 litre of milk. 3 lakh litres is the total capacity of the plant. We are producing only 3 products: Milk, Curd, and Flavoured milk. Out of total capacity, we are using 65% for milk production, 20% for curd production

and 15% for flavoured milk production.

The raw material cost (of milk) includes the transportation cost also. The dividend payment is given from First year, starting at 7% percent of equity and

with 10% increase in dividend each year.

The Company follows the written down value method of depreciation as per theCompanies Act. However, you may assume the rates as per the present income taxacts which are as follows:

Depreciation Rate :o Building: 10%o Plant & Machinery: 15%

Income tax to be 30%. Provision made for contingencies and price escalation @ 5% on the cost of

machinery and building.

Total Capacity assumed is 110000 Litres Capacity utilization considered at 30% in year 1, 40% in year 2, and 50% in year 3 &

70% year 4 onwards.

The term loan amount arrived at after finding out the margin on the basis of 75% ofthe relevant capital cost of the project and Debt Equity ratio (DER) of 1.5:1. The

amount proposed by the banker will be the lower of the amount arrived at by the

above two criteria. Round off the term loan to the nearest lakh.

The term loan will be repayable in 54 monthly equal instalments excluding themoratorium period of six months; i.e. the total repayment period is six years.

The rate of interest @ 12% is considered to be prevailing. Assume the project to startfrom 1st April of Year 1.

Selling price assumed ato Flavoured milk: Rs.20 per litreo Milk: Rs. 18 per litreo Curd: Rs. 40 per 800 gms.


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FINANCIAL FEASIBILITY

COST OF PROJECT:

MEANS OF FINANCE:

COSTS:

ESTIMATED SALES:

i ) 750

ii) 14327

iii) 24366

iv) 2765

v) 1935

44143

19473

63616

Land including Land Development

Building

Estimated Cost of the Project

Contingencies ( 5% of ii & iii )

Capital Cost of the Project

Add : Margin Money for Working Capital

Plant & Machinery & Auxiliary Equipment

Preliminary & Pre-operative Expenses

34016

Term Loan from Bank 29600

63616

Working Capital Finance 26240

Promoters Capital Equity

i) Raw Materials

Milk 144540 192720 240900 337260 337260 337260

Flavor 1807 2409 3011 4216 4216 4216

ii) Packing Materials 53600 71467 89334 125067 125067 125067

iii) Labour 4818 6424 8030 11242 11242 11242

iv) Power 6023 8030 10038 14053 14053 14053

v) Repair & Maintenance 6023 8030 10038 14053 14053 14053

110000

At 100% Year 1 30% Year 2 40% Year 3 50%

Qnty. Rs.,000's Qnty. Rs.,000's Qnty. Rs.,000's Qnty. Rs.,000's Qnty. Rs.,000's

000's Lt 000's Lt 000's Lt 000's Lt 000's Lt

Milk 18 26098 469755 7829 140927 10439 187902 13049 234878 18268.25 328828.5

Curd 40 4818 192720 1445 57816 1927 77088 2409 96360 3372.6 134904

Flavored Milk 20 8030 160600 2409 48180 3212 64240 4015 80300 5621 112420

38946 823075 11684 246923 15578 329230 19473 411538 27262 576153

Yr 4 onwards (70%)

Rate/Litre

ESTIMATED SALES

Total Sales

Total Capacity


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WORKING CAPITAL ESTIMATION:

REPAYMENT SCHEDULE

The total cost of the project can be seen to be 63616 out of which 29500 is financed

through term loan and rest is equity. The working capital needed is 26240 for first year as

can be seen through the working capital estimation.

The term loan is getting repaid in 5 years and the working capital would continue

throughout the project so no repayment. The margin money put in by the promoters can beseen from the working capital estimation.

The planned profitability statement can be seen below, it can be seen that with

passing years and increase in capacity utilisation the profit after tax is seen to increase from

7300 to around 30300 around. This profit would at least remain constant or increase more

after year 6.

The cash flows from equity, long term and total funds method is also seen to

increase over the years (ranging from 13000 to 40000).

Holding Year 1 30% Year 2 40% Year 3 50%

Period (days) WCR PBF WCR PBF WCR PBF WCR PBF

(i) Raw Materials

Milk 2.00 792 475 1056 634 1320 792 1848 1109

Flavor ingredient 30.00 149 89 198 119 248 149 347 208

(ii) Packaging Material 15.00 2203 1322 2937 1762 3671 2203 5140 3084

(iv) Debtors 60.00 40590 24354 54120 32472 67650 40590 94710 56826

(v) Working Expenses 30.00 1980 0 2640 0 3300 0 4620 0

45713 26240 60951 34987 76189 43733 106664 61227

19473 25964 32456 45438

Yr 4 onwards 70

Margin Money

WORKING CAPITAL REQUIREMENTS

Year Opening Repayment during Closing Interest WCF Interest Total

Balance The Year Balance @ 12% @ 12% Interest

1 29600 3289 26311 3552 26240 3149 6701

2 26311 6578 19733 2763 34987 4198 6961

3 19733 6578 13156 1973 43733 5248 7221

4 13156 6578 6578 1184 61227 7347 8531

5 6578 6578 0 395 61227 7347 7742

Interest on Term Loan Interest on Working Capital


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PROFITABILITY STATEMENT:

Capacity Utilisation 0.3 0.4 0.5 0.7 0.7 0.7

Years 1 2 3 4 5 6

A. Sales 246923 329230 411538 576153 576153 576153B. Costs

i) Raw Materials

Milk 144540 192720 240900 337260 337260 337260

Flavor 1807 2409 3011 4216 4216 4216

ii) Packing Materials 53600 71467 89334 125067 125067 125067

iii) Labour 4818 6424 8030 11242 11242 11242

iv) Power 6023 8030 10038 14053 14053 14053

v) Repair & Maintenance 6023 8030 10038 14053 14053 14053

vi) Depreciation 5627 4862 4204 3637 3150 2729

Total Cost 222437 293942 365554 509527 509040 508619

C. Gross Profit ( A - B ) 24486 35288 45984 66625 67113 67533

D. Administrative, Office, 7227 9636 12045 16863 16863 16863

Selling

E. Preliminary Exp. W/O 120 120 120 120 120 0

F. Intere st

i) Term Loan 3552 2763 1973 1184 395 0

ii) Working Capital 3149 4198 5248 7347 7347 7347

G. Profit/(Loss) before

Taxes ( C - D - E - F ) 10438 18571 26597 41111 42388 43323

H. Taxes 3131 5571 7979 12333 12716 12997

I. Profit after Taxes 7307 13000 18618 28778 29672 30326

J. Annual Operating Cash

Inflows :

i. Equity Funds Basis Flow 13053 17982 22942 32535 32941 33055

ii. L T Funds Basis Flow 16605 20744 24915 33719 33336 33055

iii. Total Funds Basis Flows 19754 24943 30163 41066 40683 40403


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FINANCIAL PROJECTIONS

(Rs.,000's)

Year 0 1 2 3 4 5 6

Promoter's Funds

Equity 34016

Term Loan from Bank 29600

Working Capital Finance 26240 8747 8747 17493 0 0

Cash Inflow from operation 13053 17982 22942 32535 32941 33055

Total Sources (A) 63616 39293 26728 31689 50028 32941 33055

Fixed Assets 44143 0 0 0 0 0 0

includes P/E expenses

Current Assets 45713 15238 15238 30476

Repayment of term loan 3289 6578 6578 6578 6578 0

Dividends 2381 2619 2881 3169 3486 3835

Total Application (B) 44143 51383 24435 24697 40223 10064 3835

Increase/(Decrease)

in Cash during the 19473 -12090 2294 6992 9806 22877 29221

Year ( A - B)

Opening Balance 0 19473 7383 9677 16669 26475 49352

Closing Balance 19473 7383 9677 16669 26475 49352 78572

APPLICATION

PROJECTED CASH FLOW STATEMENT

SOURCES

(Rs.,000's)

Year 0 1 2 3 4 5 6

(i) Fixed Assets 43543 37915.95 33054.08 28850.19 25212.70807 22063.1 19333.95

(ii) Preliminary Exp. 600 480 360 240 120 0 0

(iii) Current Assets 45713.25 60951 76188.75 106664.25 106664.3 106664.3

(iv) Cash & Bank Bal. 19473.3 7383.285 9676.804 16668.77 26474.5969 49351.87 78572.43

Total Assets 63616 91492 104042 121948 158472 178079 204571

(i) Promoters Funds 34015.89 34016 34016 34016 34016 34016 34016

(ii) Reserves & Surplus 4925.535 15306.06 31043.02 56651.34 82836.78 109328.2

(iii) Term Loan 29600 26311.11 19733.33 13155.56 6577.78 0 0

(iv) W.C.F. 26240 34987 43733 61227 61227 61227

Total Liabilities 63616 91492 104042 121948 158472 178079 204571

PROJECTED BALANCE SHEET

ASSETS

LIABILITIES


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DEBT SERVICABILITY:

It can be seen that the operations are generating enough cash to repay the debt; since it can

be seen that both the NSCR and GSCR are consistently greater than 1. The situation

becomes even better post Year 5, when the term loan is repaid. In Year 6 the Gross debt

service Ratio is seen to have increased to 5.5. So after the repayment of the term loan,

repayment of the projected working capital wont be an issue.

Year 0 1 2 3 4 5 Total

Cash Inflow from Operation 13053 17982 22942 32535 32941 33055 152509

Interest on Term Loan 3552 2763 1973 1184 395 0 9867

Sub - Total ( A ) 16605 20744 24915 33719 33336 33055 162375

Repayment of Term Loan 3289 6578 6578 6578 6578 0 29600

Interest on term Loan 3552 2763 1973 1184 395 0 9867

Sub Total ( B ) 6841 9340 8551 7762 6972 0 39467

NET D.S.C.R. ( A / B ) 2 2.22 2.91 4.34 4.78 4.11

NET DEBT SERVICE COVERAGE RATIO

Year 1 2 3 4 5 6 Total

Cash Inflow from Operation 13053 17982 22942 32535 32941 33055 152509

Interest on Term Loan & WCF 6701 6961 7221 8531 7742 7347 44503

Sub - Total ( A ) 19754 24943 30163 41066 40683 40403 197012

Repayment of Term Loan 3289 6578 6578 6578 6578 0 29600

Interest on Term Loan & WCF 6701 6961 7221 8531 7742 7347 44503

Sub Total ( B ) 9990 13539 13799 15109 14320 7347 74103

GROSS D.S.C.R. ( A / B ) 2 1.84 2.19 2.72 2.84 5.50 2.66

GROSS DEBT SERVICE COVERAGE RATIO


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BREAK-EVEN ANALYSIS

From the Break Even Analysis it can be referred that the needed operating level and

capacity required for achieving breakeven both in cash and production terms is decreasing

over the years. So the production is profitable and the processes are providing the required

optimisation.

(Rs.,000's)

Average Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

A. Sales 452691 246923 329230 411538 576153 576153 576153

B. Variable Costs

i) Raw Material 268302 146347 195129 243911 341476 341476 341476

ii) Packaging Material 98267 53600 71467 89334 125067 125067 125067

iii) Direct Labour 8833 4818 6424 8030 11242 11242 11242

iv) 11041 6023 8030 10038 14053 14053 14053

v) Repair & Maintenance 11041 6023 8030 10038 14053 14053 14053

vi) Interest on W.C.F. 4035 5627 4862 4204 3637 3150 2729

401520 222437 293942 365554 509527 509040 508619

C. Contribution ( A - B ) 51171 24486 35288 45984 66625 67113 67533

D. Fixed Costs

i) Adm. & Selling Expenses 13250 7227 9636 12045 16863 16863 16863

ii) Interest on Term Loan 1644 3552 2763 1973 1184 395 0

iii) Depreciation 4035 5627 4862 4204 3637 3150 2729

iv) Preliminary Expenses 100 120 120 120 120 120 0

19029 16526 17381 18342 21804 20527 19592

E. Break Even Level

Fixed Cost * Sales

i) In Sales Contribution 168339 166649 162156 164157 188558 176223 167148

ii) In %age of Operating Level 37.19 67.49 49.25 39.89 32.73 30.59 29.01

iii) In %age of Installed Capacit 27.89 40.49 34.48 31.91 26.18 24.47 23.21

F. Cash Break Even Level

i) In Sales 131760 108699 115677 125459 156065 148154 143865

ii) In %age of Operating Level 29.10594993 44.021324 35.13551 30.4855 27.08742 25.71439 24.96989

iii) In %age of Installed Capacit 21.83 26.41 24.59 24.39 21.67 20.57 19.98

Total Fixed Costs

BREAK EVEN ANALYSIS

( BASED ON YEAR 1 PROJECTION )

Total Costs (B) (i to vi)

Power


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NPV, IRR & PAYBACK PERIOD:

Equity Method:

Long Term Funds Method:

Total Funds Method:

The projections have been done till year 6, when the terminal value of assets is taken intoconsideration. It can be seen that the NPV over the years is positive for both the normal

method of calculation and the discounted method of calculation (rate assumed in

discounted method is WaCC). The Payback period throughout the three methods can be

seen to be Year 5 or Year 6. So the cash invested is repaid back. The IRR can be seen to vary

from 1% to 2% over the three methods considered.

RATIO ANALYSIS:

36825 3069year 5 year 6

29873 359PayBack

Period

Extra in payback year

Net Present Value

I.R.R. 0.196

46691 6884

year 4 year 5

6404 3544

I.R.R. 0.164

PayBackPeriod


Net Present Value

172203 57490

year 5 year 6

5803 57490

I.R.R. 0.231

PayBackPeriod


Net Present Value

RATIO BASIS 1 2 3 4 5 6

i) Gross Profit Ratio (%age) Gross Profit/sales 9.9164153 10.72 11.1736 11.56 11.6485 11.72

ii) Net Profit Ratio (%age) Net Profit/Sales 2.959085 3.95 4.52403 4.99 5.14996 5.26

iii) Return on Capital (%age) PAT/Avg. Capital 21.480102 38.22 54.7335 84.60 87.2287 89.15

iv) Debt Equity Ratio Term Loan/Capital 0.7734948 0.58 0.38675 0.19 0 0.00

v) Current Ratio CA/CL 2.0234999 2.02 2.12327 2.17 2.54818 3.03

vii) Return on Capital Emplo PAT + Interest on TL/ 17.522018 27.63 40.8072 68.28 80.5964 89.15(%age) Avg. Capital + Avg TL

RATIO ANALYSIS


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It can be seen that the gross profit ratio has improved over the years from 9 to

around 12, so the project is increasingly generating more profit. Similar case can be seen

even with the net profit ratio, the net profit ratio is seen to be more than sales and

increasing over the years.

Return on capital employed by two methods of calculation is giving promising results

with increase in value from 17 in first year to 89 in final year of projection that is sixth year.

The debt equity ratio has decreased to 0 since debt is repaid after fifth year and the

debt component becomes zero in sixth year. Similarly the current ratio can be seen to be

more that 1 and finally reaching a value of 3 in the sixth year. Which shows that its in a

position of repaying its current liabilities whenever due and the immediate repaying

capacity is increasing with time.

SENSITIVITY ANALYSIS:

In sensitivity analysis, there are two cases considered for 4% and 3% adverse

fluctuation in variable cost, sales price and both are considered. It can be seen that with

fluctuation of VC and sales price the DSCR and PAT are getting adversely affected. But even

though the values are decreasing it can be seen that the values remain positive with

significant amount of PAT and DSCR remaining constantly above 2 even in these conditions

which is a good indicator. This shows that the project is profitable enough to with stand

adverse changes in cost and selling price.

VC Sales Price SP & VC VC Sale Price SP & VC

PAT 21357.20931 10065.99122 8681.854309 -2609.36378 15711.60026 15019.53181 9373.922763

DSCR ( Net ) 4.123353249 2.400964048 2.18982452 0.467435319 3.262158648 3.156588884 2.295394284

SENSITIVITY ANALYSIS (Figures in 000s)

4% 2%

ParticularsYear-Level

Average

4 % adverse Fluctuation in 3 % adverse Fluctuation in


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CONCLUSION

It can be seen that the project is profitable and the profit increases further with each

passing year. The DSCR ratios and other analysis are showing promising results. Through

sensitivity analysis we can learn that the project is robust enough to withstand the adversefluctuations in market price and cost. The IRR is positive and the payback period of the

project can be seen to be within the limit of projection time of 5 years.

The promising financial analysis along with the market scope indicates investing in

the project would be advisable. Moreover, dairy sector being a growing sector in India along

with benign government initiatives, investment in this sector is bound to provide good

returns. So overall since all indicators are positive it would be advisable to go ahead with the

project.

Documents

Shudh Dairy U109060, U109065, U109073, U109084, U109055