True Colors Limited has announced its audited standalone financial results for the year ended March 31, 2026, reporting a 29% increase in Profit After Tax (PAT) to ₹31 Cr. Revenue from operations rose 29% year-on-year to ₹302 Cr, driven by robust growth across its digital printing ecosystem verticals. The company's board approved the financial statements during a meeting held on May 20, 2026.

Financial Performance

For the fiscal year ended March 31, 2026, the company recorded a PAT of ₹3,115.63 lakh, compared to ₹2,422.53 lakh in the previous year. Revenue from operations increased to ₹30,154.74 lakh from ₹23,336.55 lakh in the prior year. EBITDA margins for the year stood at 15.58%, a contraction of 194 basis points YoY.

The half-year performance ending March 31, 2026, reflected a PAT of ₹1,644.00 lakh on revenue of ₹15,043.38 lakh. EBITDA margins for this period improved by 62 basis points YoY to 15.89%.

Operational Metrics

True Colors reported significant volume growth across key verticals for the full year. Paper volume reached 12 Cr metres, up 26% YoY, while fabric volume grew 26% to 205 Lakh metres. Ink volumes increased 19% to 1,140 Tonnes. The company installed 109 new machines during the year, bringing its active installation base to 900+ units.

Balance Sheet and Cash Flows

As of March 31, 2026, total assets stood at ₹28,665.82 lakh, up from ₹15,497.72 lakh in the previous year. Shareholders' funds grew to ₹18,713.80 lakh. The net cash and cash equivalents decreased by ₹598.75 lakh during the year, closing at ₹127.02 lakh, primarily due to working capital requirements related to MSME vendor payments and advance payment terms for Konica Minolta inks.

Fund Utilization

The company confirmed no deviation in the utilization of funds raised via its Initial Public Offer (IPO) on September 30, 2025. The total amount raised was ₹127,96,23,600, utilized for working capital requirements, general corporate expenses, and repayment of borrowings.

True Colors Limited has informed BSE Limited of the receipt of an observation letter dated May 14, 2026, pertaining to its proposed Scheme of Amalgamation (Merger by Absorption) wherein Inkia Inks Private Limited serves as the Transferor Company and True Colors Limited serves as the Transferee Company. The development follows the company's earlier communication dated December 01, 2025, in which the Board of Directors had approved the proposed scheme under Sections 230 to 232 of the Companies Act, 2013, and other applicable provisions.

BSE Observation Letter: Key Details

The observation letter was issued by BSE under Regulation 37 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with SEBI Master Circular no. SEBI/HO/CFD/POD-2/P/CIR/2023/93 dated June 20, 2023, and Regulation 94(2) of SEBI LODR Regulations, 2015. BSE has stated that it has no adverse observations with limited reference to matters bearing on listing, de-listing, and continuous listing requirements, thereby enabling True Colors Limited to file the scheme before the Hon'ble NCLT.

SEBI Comments on the Draft Scheme

SEBI, vide its letter dated May 14, 2026, provided several comments on the draft Scheme of Arrangement. These observations, communicated through BSE, outline specific disclosure and compliance requirements that the company must address. The key directives include:

• Disclosure of all ongoing adjudication, recovery proceedings, prosecution, and enforcement actions against the company, its promoters, and directors before NCLT and shareholders.
• Display of any additional information submitted after filing the scheme on the websites of the listed company and the stock exchanges.
• Compliance with SEBI circulars issued from time to time, including ensuring all liabilities of the Transferor Company are transferred to the Transferee Company.
• Inclusion of information pertaining to the unlisted company involved in the scheme in the format specified for abridged prospectus as provided in Part E of Schedule VI of the ICDR Regulations, 2018.
• Ensuring that financials in the scheme, including those considered for the valuation report, are not more than six months old.
• Prominent disclosure of the proposed scheme details in the notice sent to shareholders.
• Proposed equity shares, if any, to be issued under the scheme shall mandatorily be in demat form only.
• No changes to the draft scheme, except those mandated by regulators, authorities, or tribunals, shall be made without specific written consent of SEBI.
• Observations of SEBI and stock exchanges shall be incorporated in the petition filed before NCLT.
• Compliance with all applicable provisions of the Companies Act, 2013, including obtaining consent from creditors.

Additional Disclosure Requirements for Shareholders

SEBI has also directed the company to ensure additional disclosures to public shareholders as part of the explanatory statement accompanying the resolution to be forwarded for approval under Sections 230 to 232 of the Companies Act, 2013. These disclosures are intended to enable shareholders to take an informed decision and include:

• Impact of the scheme on the revenue-generating capacity of the Transferee Company.
• Need, rationale, synergies, impact on shareholders, and cost-benefit analysis of the scheme.
• Valuation Report and any addendum or clarification issued by a Registered Valuer.
• Projections considered for valuation along with justification for growth rates.
• Value of assets and liabilities of the Transferor Company being transferred.
• Details of Revenue, PAT, and EBITDA of all companies involved in the scheme for the last three years, along with audited financials.
• Latest financials of entities involved, not older than six months from the date of the No Objection Certificate (NOC) of the stock exchange.
• Undertaking regarding the association of promoters and promoter group with public shareholders.
• Status of NOC from lending scheduled commercial banks, financial institutions, and debenture trustees.
• Conditions imposed by lenders, if any, and their impact on the scheme.
• Details of shareholders of the Transferor Company and their classification as Promoters and Public shareholders in the Transferee Company post-scheme.
• Pre- and post-scheme shareholding of both companies as on the date of the notice of the shareholders' meeting.
• Disclosure of all pending actions against entities involved in the scheme, their promoters, directors, and KMPs, and the possible impact on the Transferee Company.

Regulatory Clarifications and Next Steps

BSE has clarified that the submission of documents to SEBI or the exchange shall not be deemed as clearance or approval by SEBI or the exchange. SEBI and the exchange do not take responsibility for the financial soundness of any scheme or the correctness of statements made in submitted documents. The observation letter is valid for six months from May 14, 2026, within which the scheme must be submitted to the NCLT. BSE also reserves the right to withdraw its 'No adverse observation' if information submitted is found to be incomplete, incorrect, misleading, or false, or in case of any contravention of applicable rules and regulations.

The scheme remains subject to various statutory and regulatory approvals, as well as approvals from the respective shareholders and creditors of the companies involved. The observation letter has been made available on the company's website at www.truecolorsgroup.com .