Check Before You Invest : True Colors Ltd

BSE: 544531 NSE: ISIN: INE1LDV01015

| Sector: Miscellaneous | Industry: Trading

Snapshot

Q.1 Which industry/sub-sector does True Colors Ltd belong to?

True Colors Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.

Q.2 Is True Colors Ltd a good quality company?

True Colors Ltd is a weak quality company, based on a inconsistent 4-year financial track record.

Q.3 Is True Colors Ltd undervalued or overvalued?

True Colors Ltd appears Overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is True Colors Ltd a good buy now?

True Colors Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of True Colors Ltd?

True Colors Ltd revenue growth is 46% for FY-2025, which is below its 3-year CAGR of 195.67%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of True Colors Ltd?

True Colors Ltd Return on capital employed is 43.85% for FY-2025, which is in line with its 3-year historical median of 43.13%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.3 Return on Asset of True Colors Ltd?

True Colors Ltd Return on Asset is 18.93%, which is above its 3-year historical median of 13.96%, indicating improved asset utilization efficiency.

Q.4 Return on Equity (ROE) of True Colors Ltd?

True Colors Ltd Return on equity is 70.49% for FY-2025, which is below its 3-year historical median of 78.6%, indicating the business is making worse use of its shareholders capital.

Q.5 Cash conversion cycle of True Colors Ltd?

True Colors Ltd Cash conversion cycle is 51 days, above its 3-year historical median of 43 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	3-year Historic Median
Asset Turnover	1.79	2.11
ROE	70.49	78.6
ROCE	43.85	43.13
Cash Conversion Cycle	51 days	43 days

Q.6 Gross Profit margin of True Colors Ltd?

True Colors Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.6% for FY-2025, which is above its 3-year median of 7.9%, indicating increasing margins.

Q.7 Operating Profit Margin of True Colors Ltd?

True Colors Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 17.64% for FY-2025, which is above its 3-year median of 8.72% indicating increasing margins.

Q.8 Net Profit Margin of True Colors Ltd?

True Colors Ltd Net Profit Margin is 10.57% for FY-2025, is above with its 3-year median of 5.15%, indicating increasing margins.

	Current Level	3-year Historic Median
Gross Profit Margin	15.6	7.9
Operating Profit Margin	17.64	8.72
Net Profit Margin	10.57	5.15

Q.9 Debt to Equity ratio of True Colors Ltd?

True Colors Ltd Debt-to-Equity ratio is 0.86, which is above with the industry average of 0.19, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of True Colors Ltd?

True Colors Ltd Debt to cash flow from operations is 8.46, which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of True Colors Ltd?

Promoters hold 68.88% of the True Colors Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of True Colors Ltd vs industry peers?

True Colors Ltd revenue CAGR is 195.67%, compared to the industry median CAGR of 13.25%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	3-year Industry Median
Revenue Growth	46	13.3
Gross Profit Growth	176.9	15.6
Operating Profit Growth	192.9	16
Net Profit Growth	212.5	15.1

Operating Efficiency

	Current Level	3-year Industry Median
Asset Turnover	1.79	0.97
ROE	70.49	3.61
ROCE	43.85	4.53
Cash Conversion Cycle (days)	51.41	66

Valuation & price assessment

Q.1 Stock return of True Colors Ltd over the last decade?

Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	-

Q.3 Valuation ratios of True Colors Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 How do the current valuation ratios compare with 3-year historical median and industry numbers?

Valuation Ratios	Current	3-year Historic Median	3-year Industry Median
Price to Earnings	20.79	18.74	35.02
Price to Book	8.39	2.74	1.68
Price to Sales	2.2	1.98	2.16
EV to EBITDA	13.3	12.09	15.53

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