True Colors H1 FY27 Revenue Up 21%, PAT Rises 43%

Revenue from operations for H1 FY27 stood at ₹183.01 crore, up 21.1% from ₹151.11 crore in H1 FY26
Sequential revenue growth of 21.7% over H2 FY26
Gross margin expanded by 405 basis points to 30.2%
EBITDA rose 40.1% to ₹32.34 crore with EBITDA margin improving by 240 basis points to 17.7%
Profit after tax grew 43.3% to ₹21.09 crore with PAT margin rising by 178 basis points to 11.5%
Operating cash flow turned positive to ₹27.16 crore compared to outflow of ₹10.90 crore in H1 FY26
Trade receivables stood at ₹116.03 crore, broadly stable despite 20%+ revenue growth
Cash and bank balance improved to ₹21.64 crore as of September 30, 2026 from ₹1.27 crore in March 2026

Volume more than doubled to 9.97 crore meters from 4.92 crore meters in H1 FY26
Paper revenue grew 79% to ₹51.81 crore
Paper now represents 28% of total revenue
Expanded coating capacity of 2 crore meters per month running at optimum utilization (increased from 30 lakh meters monthly capacity three years ago)

Ink volume grew 22% to 689 tons
Current supply exceeds 150 tons per month to customers (compared to average 58 tons monthly in FY24)

Consumables (ink and paper) contributed 56.2% of total revenue, up from 48.7% a year ago
Recurring revenue is now the largest part of the business with better margins than machine sales
Company operates as India's only fully integrated digital textile printing ecosystem: machine distribution, ink/paper supply, and large-scale printing operations
Machine installations create recurring revenue base through warranty ties (printhead, spare parts, electronics tied to True Colors ink usage) and color profile dependencies
60+ service engineers across India's main textile clusters support customer relationships

Phase 1: 150 tons/month capacity planned by end of FY27 at Capex of ₹40-45 crore
Qualifies for 35% subsidy under Viksit Gujarat Industrial Policy 2026
Phase 2: Capacity expansion to 500 tons/month in FY28
Long-term target: 1,000 tons/month across sublimation, reactive, dispersed pigment, and adjacent applications
Partnership with ITACA of Spain added premium pigment ink with commercial supplies beginning H2 FY27
Initial exports to UAE market commenced

50/50 joint venture with Swastik Strategic Ventures LLP to establish True Colors Advanced Materials Private Limited
Integrated manufacturing platform for specialized lower GSM-coated media for digital printing
Facility planned at Bardoli, Gujarat with capacity of 8-10 crore meters of coated media per month
Will manufacture GSM grade around 29 GSM, addressing import-dependent lower GSM category
Estimated project cost: ₹320-340 crore
Funding structure: 25% equity, 75% project debt (raised at JV level)
True Colors' equity share: 50% of the 25% equity portion
Commercial production targeted for second half of FY29
Project qualifies for Viksit Gujarat Industrial Policy 2026
Rationale: India currently imports 70-75% of its sublimation paper requirements (approximately 15 crore meters monthly)

Selectively extending digital printing platform into commercial label and packaging applications
Asset-light entry through machine distribution using same underlying technology and ink capabilities

Global digital textile printing market expected to grow from USD 3.89 billion in 2025 to USD 7.63 billion by 2030
Digital printing represents only 8-9% of textile printing in India vs 80-95% in Europe
Company estimates it accounts for 16-18% of India's digital fabric printing volume
Growth drivers: fast fashion, sustainability demands, government support, economy of small runs
Environmental benefits: digital printing uses ~70% less water and 55% less energy than conventional methods
Management reiterated FY27 revenue growth guidance of 20-22%
Confidence in maintaining improved margin performance in H2 FY27

Company considers multiple funding routes: internal accruals, project-level debt, strategic JV capital, and equity
Equity raising would be considered if it creates long-term shareholder value

Receivables of ₹116.03 crore represent 90-120 days payment cycle, in line with industry norms
Improvement noted from FY26 when receivables were ₹111 crore against revenue of ₹151 crore
Company exploring options including bill discounting and channel financing for working capital management

Machine business operates at thin margins (~5% gross margin)
Consumables (ink, paper, printing) generate significantly higher margins
Consolidated EBITDA margin range: 14-18%
INKIA currently produces 80 tons/month with 35-40% supplied to True Colors ecosystem

Current installed base: 70-75% sublimation machines, 25-30% reactive machines
Expected to shift toward 60-40 ratio in next 4-5 years as viscose and cotton demand increases

Swastik Strategic Ventures LLP is a Surat-based group with textile weaving and infrastructure/construction business background
JV structure: True Colors brings technology and market knowledge; Swastik brings project execution capability and financial strength
Operational division: True Colors to focus on market development; JV partners to handle plant operations

#Tags: #TrueColors #EarningsCall #SEBIRegulation30 #DigitalTextilePrinting #BackwardIntegration #JVAnnouncement #FinancialResults #Neutral