- Our view
- May Subscribe
- Market cap then
- ~INR 135.89 Cr.
- Price band
- INR 85 to 90 per share
Modern Diagnostic & Research Centre Ltd provides pathology and radiology services through a network of 21 centres across 8 states. Minerva Capital Research Solutions assigns the IPO a May Subscribe recommendation, citing a financial turnaround, expanding operations and rising B2B contribution, while noting the company’s small scale, geographic concentration and competitive market.
About Modern Diagnostic & Research Centre
Modern Diagnostic & Research Centre Ltd provides diagnostic testing through pathology laboratories and radiology imaging services. The business began in 1985 as Modern X-Ray and Clinical Lab and was incorporated in 2012. It operates a Hub and Spoke model, with samples transported from collection points to central laboratories. As of September 30, 2025, its network included 21 centres across 8 states: 18 laboratories and 3 diagnostic centres.
Modern Diagnostic & Research Centre IPO Details
| Particulars | Details |
|---|---|
| Price Band (INR) | 85 to 90 |
| Face Value (INR) | 10 |
| Implied M.Cap (INR Cr.) | 135.89 |
| Exchange | BSE SME |
| Min. Lot Size (Retail | HNI) | 3,200 | 4,800 |
| Issue Opens on | 31-Dec’25 |
| Issue Closes on | 02-Jan’26 |
| Listing Date | 07-Jan’26 |
| No. of shares pre-issue (#) | 1,10,00,000 |
| Fresh Issue of Shares (#) | 40,99,200 |
| Offer for Sale (#) | - |
| No. of shares post-issue (#) | 1,50,99,200 |
| Funds Mobilized – Fresh Issue of Shares (INR Cr.) | 36.89 |
| Funds Mobilized – Offer for Sale (INR Cr.) | 0.0 |
IPO reservation: QIB shares offered <=50%; Retail shares offered >=35%; NII (HNI) shares offered >=15%.
Registrar: MUFG Intime India
Book Running Lead Managers: Beeline Capital
Use of Issue Proceeds
- Medical equipment: INR 20.69 Cr. is allocated to funding capex for purchase of medical equipment.
- Working capital: INR 8.00 Cr. is allocated to funding working capital.
- Repayment of borrowings: INR 1.00 Cr. is allocated to repayment of borrowings.
- General Corporate Purposes: [●]
Strengths
- Planned geographic expansion: The company plans to add a comprehensive diagnostic centre in Lucknow and six laboratories across Delhi, Meerut, Kanpur, Aligarh and Chandigarh. It is also expanding in Uttar Pradesh, Rajasthan and Punjab to reduce its reliance on Haryana.
- Growing B2B contribution: Revenue from hospitals, nursing homes and clinics increased from 46.58% in FY23 to 59.57% in the period ended June 30, 2025.
- Higher testing volumes: Tests conducted increased from 187.95 lakhs in FY23 to 324.37 lakhs in FY25.
- Rising revenue per patient: Average revenue per patient moved from ₹488.56 in FY23 to ₹590.58 in the period ended June 30, 2025.
- Experienced promoters: Dr. Devendra Singh Yadav is the Promoter, Chairman and Managing Director, with 40 years of experience in medical diagnostics and research. Dr. Deepali Yadav is the Promoter and Whole Time Director.
Modern Diagnostic & Research Centre Key Financials
| Particulars | FY23 | FY24 | FY25 | Q1FY26 |
|---|---|---|---|---|
| Revenue (excl. other inc.) | 56.3 | 67.1 | 77.9 | 22.5 |
| Growth Rate Y-o-Y % | - | 19.3% | 16.1% | |
| EBITDA (excl. other inc.) | (1) | 11.1 | 18.0 | 5.9 |
| PAT | (5.7) | 5.8 | 9.0 | 3.0 |
| Gross Margin % | 68.9% | 73.7% | 75.9% | 74.8% |
| EBITDA % (excl. other inc.) | (1.8%) | 16.5% | 23.0% | 26.1% |
| PAT % | (10.1%) | 8.4% | 11.4% | 13.2% |
| Debt (Short+Long) | 15.3 | 20.5 | 22.1 | 30.4 |
| Debt/Equity | 2.6x | 1.7x | 1.1x | 1.3x |
| ROE % | (64.92)% | 65.4% | 55.21% | 13.49%* |
| ROCE % | (17.18)% | 25.57% | 36.18% | 9.54%* |
| CFO / EBITDA % | 71.7% | 76.4% | (107.4%) |
*Not Annualized. NWC includes Inventory, Receivables & Payables; & NWC days is computed as % of rev.
Revenue and profitability improved across FY23–FY25: revenue reached 77.9 and PAT reached 9.0 in FY25, compared with a PAT loss of (5.7) in FY23.
Business Mix and Operations
Pathology contributed 75.23% of revenue in FY25 and 80.70% in the period ended June 30, 2025; radiology contributed 24.77% and 19.30%, respectively. The company reported 2 NABH accreditations for imaging services, both in Gurugram, and 5 NABL-accredited labs in Gurugram, Srinagar, Amritsar, Yamuna Nagar, Bareilly and Guwahati.
| Particulars | FY23 | FY24 | FY25 | June 30, 2025 |
|---|---|---|---|---|
| B2B | 46.58% | 49.07% | 51.34% | 59.57% |
| B2C | 53.42% | 50.93% | 48.66% | 40.43% |
Management
- Dr. Devendra Singh Yadav: Promoter, Chairman and Managing Director, aged 72 years, with 40 years of experience in the medical diagnostic and research field. He holds an MBBS from Medical College Rohtak and a Diploma in Medical Radio-diagnosis (DMRD) from the University of Delhi.
- Dr. Deepali Yadav: Promoter and Whole Time Director, aged 42 years. She holds an MD in Radio-diagnosis from HIHT University, Dehradun, and specializes in CT Coronary Angiography, CT/MRI case reporting, and ultrasound-guided FNAC.
Peer Comparison
Vijaya Diagnostics Ltd is the peer mentioned in the RHP. In FY25, Modern Diagnostics reported operating revenues of 77.9, EBITDA margins of 23.0%, PAT margins of 11.4% and a D/E ratio of 1.1x; the corresponding figures shown for Vijaya Diagnostic were 681, 40.1%, 20.5% and 0.4x.
IPO Valuation and Our View
At the price band of INR 85 to 90 per share, the issue is valued at a P/E ratio of 15.2x based on FY25 PAT. The report weighs the experienced promoter, financial turnaround with margin expansion, planned centres and healthcare industry tailwinds against the company’s small scale, competitive intensity and the need to ramp up operations following IPO-led capex. Minerva Capital Research Solutions assigns the issue a May Subscribe recommendation.
- INR 85 to 90 per share
- IPO price band
- 15.2x
- P/E ratio based on FY25 PAT
- May Subscribe
- Recommendation
Key Risks
- Geographic concentration: 65.8% of revenue as of June 30, 2025 came from Haryana. The detailed geographic table reports Haryana at 65.80%, alongside Jammu & Kashmir at 8.51%, Uttar Pradesh at 7.95%, Rajasthan at 6.16% and West Bengal at 4.15%.
- Debt and working capital: The report identifies a high debt to equity ratio and expects it to come down as IPO proceeds fund working capital.
- Regulatory intervention: Government may cap diagnostic test prices.
- Competitive industry: Diagnostics faces competition from national chains, regional labs and price-aggressive standalone centres.
- Related party transaction: Rent to the Promoter of INR 82.09 Lakhs in FY25 remains a key monitorable.
Our View
The report’s May Subscribe view reflects the improvement in financial performance and the company’s expansion plans, alongside growth in B2B activity and testing volumes. The key considerations remain its small scale, high reliance on Haryana, competition and the execution required to ramp up new capacity.
Standard disclosures
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Regulatory disclosures
Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).
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For any queries or grievances: Mr. Nishant Gupta | Email: nishant.gupta@mcapital.in or guptanishant.iimi@gmail.com | Contact Number: 8171433387 | Website: www.mcapital.in | Twitter: @Mcapital_In
- Equity Research Analyst for this report: Mr. Shubham Upadhyay (shubham.upadhyay@mcapital.in)
Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%