Feasibility studies

Should you proceed with the proposed project idea or expansion project ?

Organizations can grow organically or inorganically. To assess feasibility of green field or expansion projects, we undertake project feasibility studies including market demand analysis, operational feasibility, financial modeling, and scenario and sensitivity analysis. A feasible business venture is one where the business will generate adequate cash-flow and profits, withstand the risks it will encounter, remain viable in the long-term and meet the goals of the promoters.

For Whom

  • To take go no go decision about new venture
  • For new greenfield project
  • For expansion decisions

A feasibility study answers a critical question for the client. Should we proceed with the proposed project idea? A feasibility study also as a decision support system for client going forward.

Totally customised, feasibility study typical covers following scope –

Executive Summary

Promoters Objective
▸Objective of the new venture
▸Core capability
▸Risk taking ability

Market Study
▸Territory and market study
▸Market potential
▸Customer segments and buying behaviours
▸Growth drivers of the market
▸Competition and their comparative assessment
▸Likely market challenges

Location analysis

Regulatory requirements
▸Regulatory restrictions, if any, & requirements for the project
▸Subsidies & Incentive, if any

Business Offering 
▸Offering description
▸Key stategic choicess – Type, range, price, qualitylems and needs
▸Business Model

Operations
▸Capacity & offering mix
▸Delivery model choices
▸Infrastructure requirements
▸Organisation Structure
▸Technical requirements
▸Key Operational Assumptions
▸Raw Material
▸Human Capital
▸Others (Power, Fuel, Water, Others)
▸Operating risks

CAPAX Requirements
▸Unit description
▸Land
▸Building & Civil Works
▸Equipment & Machinery
▸Project Engineering, Construction management & Know how

Financial Model
▸Project Cost
▸Means of Financing (The most Preferred Mix)
▸Profitability Statement (10 Years Explicit Forecast Period)
▸Balance Sheet & Cash flow Statements
▸Analysis of Returns & IRR Computation
▸Risks Profiling
▸Sensitivity Analysis

Implementation milestones

 

Our Approach

Following approach is customised on case to case basis –

Ascertaining the Market demand
Studying the market dynamics, market segments, competition and profile of customers to find out the future potential of the prospective business

Ascertaining the operational parameters
Identify operational details like manpower, capacity, other important costs and developing feasible revenue model based on uniqueness of the project

Ascertaining the Project costs
Identifying key project costs elements including incorporating client, specific requirements

Development of financial model
Develop financial projections based on project cost and operational parameters including risk and sensitivity analysis (with project phasing) Discussions with client and finalisation Discussion of draft report with client and finalisation of feasibility report

 

Time Taken

Generally we take about ten to twelve weeks depending upon size & complexity of business

 

Deliverables

Our primary deliverable is Project Feasibility Report (PFR), which is backed by a detailed financial model to carry out the sensitivity analysis of the project.