Introduction

Lipstick is a beauty product that contains oils, pigments, waxes, and emollients, which gives texture, color, and protection to lips. With the increasing internet penetration, the online market for the purchase of consumer goods has seen rapid growth in the last 3-4 years in India. This category has attracted a few vertical specialists, like Nykaa, Purplle, Nnnow, etc. who are riding on the increasing e-tailing growth and vying for a significant pie in the online cosmetics space. Nykaa offers more than 600 brands in both offline and online stores in India. In addition, herbal and organic lipsticks are gaining popularity among the consumers worldwide.

There is a wide assortment of lipsticks available in the Indian market including matte, sheer, satin stain, powder lipstick, and others. These lipsticks are available in variety of shades such as red, nude, brown, purple, maroon, pink, and others. This is due to the benefits associated with these lipsticks over traditional lipstick that includes healing lips, moisturizing lips, and others. The use of lip powder, especially in matte lipsticks is the latest trend followed in the lipstick market. It is gaining huge momentum among women population, owing to matte finish and smooth & creamy texture.

Market potential & Strategy

Lipstick Market was valued at INR 1075.240 Crores in 2019 and is projected to reach INR 1571.440 Crores by 2027, growing at a CAGR of 5.24% from 2020 to 2027. The Rise in the consciousness regarding personal grooming, appearance, and an increased standard of living among female consumers across the world is expected to drive the demand. Moreover, the increasing spending power of women owing to the rise in the female workforce across the globe is expected to fuel the growth during the forecast period. The lipstick market is driven by the increasing working women population and young population, growing urbanization and rising purchasing power of the consumers. Additionally, growing demand from emerging markets and inclination towards natural and organic lipsticks is expected to further propel the market growth through 2025. Increasing health consciousness among the consumers has led to the adoption of natural or organic lipsticks, which are free from toxic chemicals such as cadmium, lead, formaldehyde, paraben, among others. Additionally, these lipsticks have a high content of antioxidants and do not cause any harm to the skin. However, the sudden outbreak and spread of COVID-19 pandemic and subsequent lockdown across countries have adversely impacted the beauty and personal care industry, globally. The consumer spending has significantly reduced during the time of pandemic and a consumer shift is also observed towards safe and reliable products. This in turn is expected to slow down the market growth in 2020. Also, the lockdown has led to shut down of all economic activities and organizations are working remotely and the following work from home culture, which has significantly reduced the demand for lipsticks among the working women.

Project at a glance

Name & Address of Unit

Lipstick Manufacturing

Your address

Details of unit

Email	:	[email protected]
Phone	:	0000000000
Constitution	:	Proprietership
Total project cost	:	*******
Fixed Capital	:	*******
Working Capital	:	*******
Total Bank loan	:	*******
Promoter(s) contribution	:	*******
Term loan	:	*******

Name & address of promoter(s)

Name		: Proprator
Designation		: Proprator
Category		: General

Project Feasibility Ratios

Debt Service Coverage Ratio (Average)

:1.87

Current ratio (Average)

:2.63

	Year 1	Year 2	Year 3	Year 4	Year 5
Current ratio	1.53	2.06	2.62	3.19	3.76
Quick ratio	1.13	1.56	2.10	2.64	3.18
Interest coverage ratio	3.87	5.55	7.00	9.48	14.71
Debt equity ratio	2.863	2.080	1.528	1.020	0.542
TOL/TNW	3.02	1.45	0.79	0.43	0.21
DSCR	1.65	1.86	1.90	1.94	1.97
Gross profit Sales Percentage %	29.23 %	28.54 %	28.18 %	27.86 %	27.50 %
Net profit Sales Percentage %	10.84 %	10.56 %	11.10 %	11.57 %	11.90 %
BEP in % of installed capacity %	49.90 %	27.12 %	27.12 %	27.12 %	27.12 %
BEP in sales of Rs	2,620,800.00	1,840,695.65	1,972,173.91	2,103,652.17	2,235,130.43
Return On Capital Employed	0.26	0.34	0.34	0.33	0.33

Project Feasibility graph

Net profit Sales %

Quick ratio

Revenue v/s Expense

Expense Splitup

Project Cost

Sl. no	Item	Amount Rs
1	Working Capital	*******
	Total	*******

Working Capital Computation

Sl. no	Item	Amount Rs
1	Consumables / stock in hand	*******
2	Work in progress	*******
3	Finished goods	*******
4	Working expense.	*******
5	Receivables/Sundry debtors	*******
6	Payables	*******
7	Total working capital	*******
8	Own Contribution	*******

Total Yearly Expense

Sl. no	Item	Amount Rs
	Total	*******

Application of Fund

Sl. no	Item	Subsidy %	No.	Rate	Amount Rs
	Total Investment				*******
	Total Subsidy				*******
	Net Investment				*******

Means of Finance

Sl. no	Item	Amount
1	Term Loan	*******
2	Working capital Loan	*******
3	Total loan	*******
4	Term Loan contribution	*******
5	Working capital contribution	*******

Profitability Statement

		Year 1(!*)	Year 2	Year 3	Year 4	Year 5
Revenue from operation
Sales	15.93	*****	*****	*****	*****	*****
Add :
Closing stock		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Less :
Opening stock		*****	*****	*****	*****	*****
Stock purchase	7.20	*****	*****	*****	*****	*****
Salary	3.60	*****	*****	*****	*****	*****
Repairs and maintenance charges	0.24	*****	*****	*****	*****	*****
gas	0.12	*****	*****	*****	*****	*****
ELECTRICITY bill	0.12	*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Gross profit		*****	*****	*****	*****	*****
Less :
Rent	0.12	*****	*****	*****	*****	*****
Telephone/Postal &internet charge	0.12	*****	*****	*****	*****	*****
Total		*****	0*****	*****	*****	*****
Depreciation		*****	*****	*****	*****	*****
Interest on TL		*****	*****	*****	*****	*****
Interest on WC		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Profit before tax		*****	*****	*****	*****	*****
Income Tax		*****	*****	*****	*****	*****
Profit after tax		*****	*****	*****	*****	*****

Cash flow statement

Cash Inflow	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
Capital	0.63	*****	*****	*****	*****	*****
Subsidy	*****	*****	*****	*****	*****	*****
Termloan	*****	*****	*****	*****	*****	*****
Profit before tax with interest	*****	*****	*****	*****	*****	*****
Increase in WC loan	*****	*****	*****	*****	*****	*****
Depreciation	*****	*****	*****	*****	*****	*****
Increase in Current liability	*****	*****	*****	*****	*****	*****
Total Cash Inflow	*****	*****	*****	*****	*****	*****
Cash Outflow
Fixed Assets	*****	*****	*****	*****	*****	*****
Increase in Current asset		*****	*****	*****	*****	*****
Interest on TL	*****	*****	*****	*****	*****	*****
Interest on WC	*****	*****	*****	*****	*****	*****
Income Tax	*****	*****	*****	*****	*****	*****
Decrease in Term loan		*****	*****	*****	*****	*****
Drawing	*****	*****	*****	*****	*****	*****
Total Cash Outflow	*****	*****	*****	*****	*****	*****
Opening balance	*****	*****	*****	*****	*****	*****
Net Cashflow	*****	*****	*****	*****	*****	*****
Closing balance	*****	*****	*****	*****	*****	*****

Balance sheet

Liability	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
A. Share holders funds
Capital	*****	*****	*****	*****	*****	*****
Reserve & Surplus	*****	*****	*****	*****	*****	*****
B.Non current Liabilities
Termloan	*****	*****	*****	*****	*****	*****
C.Current Liabilities
Working capital loan	*****	*****	*****	*****	*****	*****
Account payable		*****	*****	*****	*****	*****
Total Liability	*****	*****	*****	*****	*****	*****
Asset
A. Non current Assets
Fixed Assets	*****	*****	*****	*****	*****	*****
B. Current Assets
Inventory	*****	*****	*****	*****	*****	*****
Trade receivables	*****	*****	*****	*****	*****	*****
Cash and cash equivalence	*****	*****	*****	*****	*****	*****
Total Asset	*****	*****	*****	*****	*****	*****

Repayment of Term loan

Year	Installment	Outstanding at the beginning	Principal repayment	Interest	Amount paid	Outstanding at the end
1	1	*****	*****	*****	*****	*****
1	2	*****	*****	*****	*****	*****
1	3	*****	*****	*****	*****	*****
1	4	*****	*****	*****	*****	*****
1	5	*****	*****	*****	*****	*****
\|	\|	\|	\|	\|	\|	\|
\|	\|	\|	\|	\|	\|	\|
5	56	*****	*****	*****	*****	*****
5	57	*****	*****	*****	*****	*****
5	58	*****	*****	*****	*****	*****
5	59	*****	*****	*****	*****	*****
5	60	*****	*****	*****	*****	*****

Debt Service Coverage Ratio

Particulars	Year 1	Year 2	Year 3	Year 4	Year 5
Receipts
a).Net Profit	*****	*****	*****	*****	*****
b).Depreciation	*****	*****	*****	*****	0.30
c).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
Repayments
a).Loan Principal	*****	*****	*****	*****	*****
b).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
DSCR	*****	*****	*****	*****	*****

Depreciation

Particulars	Rate	Year 1	Year 2	Year 3	Year 4	Year 5
Building	*****	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Computers/ Printers /Photocopier/Electronic gadget	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Furniture & fixtures	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Racks & storage/Interior works	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new item	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Air-conditioning	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Other investments	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Total less depreciation		*****	*****	*****	*****	*****
Total written down value		*****	*****	*****	*****	*****

Conclusion

The project as a whole describes the scope and viability of the Trading industry and mainly of the financial, technical and its market potential.The project guarantee sufficient fund to repay the loan and also give a good return on capital investment. When analyzing the social- economic impact, this project is able to generate an employment of 5 and above. It will cater the demand of Trading and thus helps the other business entities to increase the production and service which provide service and support to this industry. Thus more cyclic employment and livelihood generation. So in all ways, we can conclude the project is technically and socially viable and commercially sound too.

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