An incense maker has 6% of its market. Size the market from households up, then test whether the management plan to reach 10% share in five years is credible.

The market is about Rs 9,198 crore at retail and Rs 6,439 crore at the factory gate, so 6% is about Rs 386 crore of revenue; reaching 10% in five years means growing about 17% a year in a market growing 6%. The plan is credible only if it names whose share it takes. Formalisation of unorganised makers gives Dhoopkala about 0.6 points at its current strength; the other 3.4 must come from named brands, through new states or more outlets, and the plan must show how.

Build it as a chain of multiplications, each one an assumption you say out loud. Think of estimating a city's tea market: homes, the share that drink tea, cups a day, price a cup. 30 crore households, 70% of which use incense, is 21 crore users; at 1.5 sticks a day that is about 11,498 crore sticks a year; at Rs 0.80 a stick it is a retail market of about Rs 9,198 crore. A company's revenue is measured at the price it sells to the trade, so take off the 30% kept by distributors and shops: about Rs 6,439 crore at the factory gate. Dhoopkala's 6% is then about Rs 386 crore, which you should check against its reported revenue; if the two differ by a lot, one of your inputs or its share claim is wrong.

Turn the share goal into a growth rate, because that is what the model will carry. The factory-gate market grows from Rs 6,439 crore to about Rs 8,616 crore; 10% of that is Rs 862 crore against Rs 386 crore today, about 17% a year, against 6% for the market. Holding 6% would give Rs 517 crore. So about 73% of the plan's extra revenue depends on the share gain, not on the market. On distribution, Dhoopkala earns about Rs 19,300 a year per outlet today; at the same productivity, Rs 862 crore needs about 4.5 lakh outlets, more than double the 2 lakh it has.

This is the question that decides the case. A share gain is always someone else's share loss, so a credible plan names the loser and the weapon. The natural source is the unorganised segment, as households trade up to packaged brands; suppose it falls from 42% to 36%. If those 6 points went to brands in proportion to their size, Dhoopkala, with 6 of 58 branded points, would win about 0.6 of them. The plan needs 4. The remaining 3.4 points must come from the two leaders or the regional brands, which means either entering states where regional brands are weak or winning shelf space from leaders that spend more on advertising.

Plausible but unproven, so the fund should underwrite something between the two. A base case near Rs 517 to 689 crore of year 5 revenue, with management's Rs 862 crore as the upside, is the honest way to carry this plan. Three tests would move it: share by state from distributor data, which shows whether Dhoopkala is already winning where it competes; revenue per outlet in the newest states compared with the oldest, which shows whether expansion holds productivity; and a sample of store checks on shelf position against the leaders. The limitation: every input in the sizing is an assumption, and sticks a day is the weakest, so state a range rather than a single number.