True Colors Limited paper growth lifts recurring revenue share

True Colors Limited raised paper revenue 79.04% year on year to Rs 51.81 crore in H1 FY27, while machine revenue declined 18.41% to Rs 30.96 crore. Management said inks and paper made up 56.2% of revenue, versus 48.7% a year earlier, alongside a 405-basis-point gross-margin increase.

What drove True Colors’ H1 FY27 revenue growth?

True Colors’ revenue from operations rose 21.11% year on year to Rs 183.01 crore in H1 FY27 from Rs 151.11 crore in H1 FY26. It also increased 21.66% from Rs 150.43 crore in H2 FY26, while total income was Rs 183.29 crore, including Rs 0.28 crore of other income.

Paper supplied the largest disclosed year-on-year revenue increase. Its revenue rose Rs 22.87 crore from Rs 28.94 crore in H1 FY26 to Rs 51.81 crore in H1 FY27. Fabric revenue increased Rs 9.78 crore to Rs 49.12 crore, inks rose Rs 2.81 crore to Rs 41.76 crore and others increased Rs 3.42 crore to Rs 9.35 crore.

Machines moved in the opposite direction year on year, declining Rs 6.99 crore from Rs 37.95 crore to Rs 30.96 crore. However, machine revenue was Rs 7.97 crore higher than Rs 22.99 crore in H2 FY26, showing a sequential recovery that did not restore the prior-year half-year level.

How did True Colors’ revenue mix change in H1 FY27?

True Colors’ paper share of revenue rose to 28.31% in H1 FY27 from 19.15% in H1 FY26, an increase of 9.16 percentage points. Machine share fell to 16.92% from 25.11%, while fabric accounted for 26.84%, inks for 22.82% and others for 5.11% in H1 FY27.

Management described inks and paper as the recurring business and said they contributed 56.2% of H1 FY27 revenue, up from 48.7% a year earlier. The presentation’s recurring-revenue-ratio chart shows 56% for H1 FY27, after 49% in H1 FY26 and 52% in H2 FY26. Both disclosures indicate a greater reported contribution from consumables as machine revenue fell year on year.

The mix change coincided with gross profit growing 39.89% to Rs 55.24 crore, faster than revenue growth of 21.11%. Gross margin rose to 30.19% from 26.13%, a reported increase of 405 basis points. Management attributed the margin increase, stated as 30.2% in its commentary, to the richer paper-and-inks mix.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 40.12% to Rs 32.34 crore despite operating expenses rising 41.13% to Rs 29.48 crore. EBITDA margin was 17.67%, compared with 15.27%, while profit after tax rose 43.25% to Rs 21.09 crore and its margin increased to 11.52% from 9.74%.

What volumes and installations supported consumables revenue?

True Colors reported 10 crore metres of sublimation paper volume in H1 FY27, compared with 5 crore metres in H1 FY26 and 7 crore metres in H2 FY26. Management gave the more precise H1 FY27 figure of 9.97 crore metres and said volume had more than doubled year on year, alongside the Rs 51.81 crore of paper revenue.

Ink volume rose to 689 tonnes from 563 tonnes in H1 FY26 and 577 tonnes in H2 FY26. Fabric volume was 100 lakh metres in the operating table, compared with 93 lakh metres and 112 lakh metres, respectively; management cited 99.71 lakh metres and 7% year-on-year growth.

The installed base reached 956 machines in H1 FY27, up 11.29% from 859 in H1 FY26 and from 900 in H2 FY26. New installations were 56, down from 68 a year earlier but up from 41 sequentially. Management said each placed machine creates ongoing demand for ink and paper, which customers buy daily or weekly.

What are True Colors’ paper and ink manufacturing plans?

True Colors said its sublimation-paper coating capacity of 2 crore metres a month was operating at optimum utilisation in H1 FY27. The presentation says coating capacity increased from 30 lakh metres to 2 crore metres a month over three years, while management identified base-paper supply as the next constraint on paper growth.

Management plans a first phase of INKIA ink manufacturing capacity of 150 tonnes a month by the end of FY27. It linked the plan to its earlier distribution-led development of an ink customer base and to H1 FY27 ink volume of 689 tonnes.

For paper, True Colors has announced a proposed 50:50 joint venture, True Colors Advance Materials Private Limited, to manufacture base and speciality paper. The venture is intended to manufacture, process, coat, convert and market paper and allied products, with incorporation proposed within about 60 days. True Colors will hold 50.00% and subscribe at Rs 10 per share for cash.

Management said the joint venture is planned for capacity of 8 crore to 10 crore metres a month. The presentation estimates India imports 70% to 75% of lower grams-per-square-metre, or GSM, sublimation coated paper, and describes the project as a response to this supply dependence. It does not disclose a project completion date or financial-contribution target.

Conclusion

True Colors’ H1 FY27 mix shift was led by paper, whose revenue rose 79.04% to Rs 51.81 crore while machine revenue declined 18.41% to Rs 30.96 crore. Higher paper and ink sales coincided with management’s reported recurring-revenue share of 56.2%, gross margin of 30.2% and EBITDA of Rs 32.34 crore.

The next disclosed milestones are the planned 150-tonne-a-month INKIA manufacturing phase by the end of FY27 and incorporation of the proposed paper joint venture within about 60 days. Progress on the proposed 8 crore to 10 crore metres monthly base-paper capacity and subsequent paper volumes will indicate how the backward-integration plans develop.