The study has examined economics and economic viability of the ginneries. The study revealed that the difference in total investment between semi-automized and fully automized ginning units was due to the level of mechanization of units. Fully automized ginning units required more fund for management of the unit. The annual gross income was found to be ` 3749.87 lakhs in fully automized ginning units and ` 3399.03 lakhs in semi-automized ginning units whereas net income was ` 2409.50 lakhs and ` 1553.58 lakhs respectively. Under the situation of normal cost and return for all units, the net present value (NPV) was found positive indicating the financial soundness of the investment in the cotton ginning units. The pay-back period was found about 10 years which seems longer. In the varying situations of costs and returns, only situation-IV is found little hopeful with 10% increase in gross profit and 10% decrease in total cost ginners were get highest NPV and IRR with lowest PBP in category-wise and overall sensitivity analysis of cotton ginneries.

Highlights

• The annual gross income was found to be highest in fully automized ginning units and the lowest in semi-automized ginning units in Saurashtra region.
• The investment on cotton ginning unit is a profitable proposal but critical in Saurashtra region because slight decrease in prices or increase in production cost might turn out into loss situations.