Behind the model
How the manufacturing model works
Every number in the calculator is derived bottom-up from your inputs — no black box. Below is each formula, paired with a worked example from the default 10,00,000-unit/yr plant. Change any input in the tool and these relationships hold.
Capacity & throughput
The plant has a nameplate annual capacity; what it actually produces in a given year is capacity × the utilization for that year (see the ramp below).
Nameplate capacity
annual capacity (units / yr)
10,00,000 units/yr
Units produced (year y)
capacity × utilization(y)
stabilized: 8,00,000 units (80% util)
Stabilized annual output
capacity × stabilized utilization%
8,00,000 units/yr
CapEx — build cost
Land (plus stamp duty) + building + machinery + utilities + setup line items, then a contingency and interest-during-construction (IDC). CapEx per unit of capacity is an output, never an assumption.
Stamp duty on land
land × 6% (registration, by state 5–7%)
₹12 L
Base build cost
land + stamp duty + building + machinery + utilities + Σ line items
₹34.9 Cr
Contingency
base × 5%
₹1.75 Cr
Sub-total (with contingency)
base + contingency
₹36.7 Cr
Interest during construction (IDC)
total × debt% × interest% × (months ÷ 12) × ½
12 mo → ₹1.1 Cr
Total project cost
sub-total + IDC
₹37.8 Cr
CapEx per unit of capacity (derived)
total project cost ÷ annual capacity
₹378 / unit
OpEx — annual running cost
Variable costs (raw materials, power) scale with units produced; fixed costs (labour, maintenance, other) are annual and escalate each year. Power cost is derived from consumption × tariff — never entered directly.
Raw materials (variable)
units × RM cost/unit × (1 + opexEsc)^(yr−1)
stabilized: ₹30.9 Cr/yr
Power cost per unit (derived)
kWh/unit × tariff = 3 × ₹8.5
₹25.50 / unit
Labour & power
annual labour + units × power cost/unit, escalated
stabilized: ₹7.49 Cr/yr
Maintenance
(base + contingency, pre-IDC) × 2.5% / yr
stabilized: ₹1.01 Cr/yr
Other fixed
other fixed annual, escalated
stabilized: ₹3.31 Cr/yr
Working-capital interest
see Working capital below — an opex line
stabilized: ₹85.6 L/yr
Total OpEx
raw materials + labour & power + maintenance + other fixed + WC interest
stabilized: ₹43.5 Cr/yr
OpEx escalation
base × (1 + 5%)^(yr−1)
5% / yr
Working capital — the Tandon template
Cash locked in raw material, work-in-progress, finished stock and receivables. Banks appraise it as days of revenue, fund (1 − margin) through a cash-credit limit, and expect the promoter to fund the margin — the standard Indian bank template.
Requirement (year y)
revenue(y) × cycle days ÷ 365 = revenue × 75/365
stabilized: ₹10.9 Cr
Bank CC limit
requirement × (1 − 25% margin)
₹8.16 Cr
Promoter margin
requirement × 25% — funded from equity
₹2.72 Cr
CC interest (opex line)
bank-funded share × 10.5% — reduces EBITDA
stabilized: ₹85.6 L/yr
ΔWC (cash absorbed)
requirement(y) − requirement(y−1); full Δ hits project cash flow, the margin share hits equity
year 1: ₹6.16 Cr
Release at horizon
final-year requirement returns as cash in the last year
₹16.9 Cr
Revenue, utilization ramp & phasing
Revenue is units produced × price, with price escalating each year. Utilization ramps linearly from start to a stabilized plateau; staged builds bring capacity online vintage by vintage.
Revenue (year y)
units(y) × price/unit × (1 + priceEsc)^(yr−1)
year 1: ₹30 Cr → stabilized: ₹52.9 Cr
Price escalation
price × (1 + 5%)^(yr−1)
5% / yr
Utilization ramp (linear)
start + (stabilized − start) × (age−1) ÷ (ramp yrs − 1)
50% → 80% over 3 yrs
Phased build (vintages)
each phase commissions on its own year and ramps from scratch
leave blank for an all-at-once build
Financing — debt, moratorium, tax & depreciation
Project debt with an interest-only moratorium during ramp-up, then the principal amortizes over the remaining tenor. Straight-line depreciation on the depreciable base (land excluded); tax with loss carryforward.
Debt / equity split
debt = total cost × debt% ; equity = remainder
₹22.7 Cr debt · ₹15.1 Cr equity
Principal moratorium
interest-only for the first N years, then amortize
2 yr grace, 8 yr tenor
Equal-principal repayment
debt ÷ (tenor − moratorium) each amortizing year
₹3.78 Cr / yr over 6 yrs
Annuity (EMI) option
debt × r ÷ (1 − (1+r)^−(tenor−moratorium))
level-payment alternative
Interest
outstanding balance × interest rate
year 1: ₹2.27 Cr (interest-only)
Depreciable base (land excluded)
total project cost − land − stamp duty
₹35.6 Cr
Depreciation (straight-line)
depreciable base ÷ 15 yrs
₹2.38 Cr / yr
Tax (with loss carryforward)
max(0, PBT − losses) × 25% ; losses carry forward
shelters early-year losses
Capital subsidy — state & central incentives
Most state industrial policies subsidize 10–25% of eligible fixed capital investment (ex-land), disbursed after commissioning. The model books it as a one-time cash inflow in the first operating year — it never reduces the debt sizing or the depreciation base.
Eligible investment (ex-land)
building + machinery + utilities + line items
₹32.8 Cr
Capital subsidy
eligible investment × 0%
₹0 (off by default)
Timing
received in the first operating year (post-commissioning disbursal)
boosts year-1 cash flow, payback and IRR
Returns & coverage
The unlevered cash flows give the project view; the equity cash flows give the geared view. Project IRR uses a tax that excludes the interest shield, so it is genuinely financing-independent. A longer construction window defers first revenue and steepens the J-curve.
EBITDA
revenue − total OpEx (incl. WC interest)
stabilized: ₹9.39 Cr (18% margin)
Unlevered (project) FCF
EBITDA − project tax − CapEx − ΔWC (+ subsidy yr 1, + WC release at horizon)
Project IRR 12.6%
Equity FCF
PAT + depreciation − principal − equity-funded CapEx − margin share of ΔWC
Equity IRR 19.7%
Construction lead
first revenue deferred by ⌈months ÷ 12⌉ − 1 extra years
no extra lead year
NPV
Σ unlevered FCF ÷ (1 + discount)^t
@ 12% = ₹1.6 Cr
Payback
year cumulative unlevered cash flow first turns positive
7.2 yr
DSCR
CFADS ÷ debt service ; CFADS = EBITDA − tax (amortizing years only)
min 1.43× · avg 1.80×
LLCR
PV(CFADS over loan life) ÷ debt
1.70×
Equity multiple (MOIC)
Σ equity cash returned ÷ equity invested
4.60×
Break-even utilization
stabilized utilization at which project NPV = 0
78%
Unit economics (stabilized)
The per-unit view at the stabilized run-rate — what each unit earns and costs.
Revenue / unit
stabilized revenue ÷ stabilized units
₹662
Cost / unit
stabilized OpEx ÷ stabilized units
₹544
Contribution / unit
(revenue − variable cost) ÷ stabilized units
₹248
CapEx / unit of capacity
total project cost ÷ annual capacity
₹378
Operations & ESG
What the plant consumes and emits at the stabilized run-rate.
Energy
annual units × power (kWh/unit) ÷ 1000
2,400 MWh/yr
Carbon
energy (kWh) × grid emission factor ÷ 1000
1,704 tCO₂/yr
Carbon / unit
power (kWh/unit) × grid emission factor
2.13 kgCO₂/unit
Contribution margin
(price − RM − variable power) ÷ price
37%
These are transparent planning estimates, not a quote. A real build needs a proper feasibility study and DPR — that’s where we help. Open the calculator →