Modern Diagnostic & Research Centre

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

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

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.

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

• Research Analyst has served as an officer, director or employee of subject company(ies): No
• We or our associates have received compensation from the subject company(ies) in the past 12 months: No
• We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
• We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months –No
• We or our associates may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report –No
• We or our associates or Research Analyst or his/her relative's financial interest in the subject company(ies)- No
• Nature of financial interest in subject company, if any –Nil
• We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
• Subject company (ies) may have been client during twelve months preceding the date of distribution of the research report-No.
• We or our Associates or Research Analyst are engaged in market making of subject company – No
• By referring to any particular sector, Minerva Capital Research Solutions does not provide any promise or assurance of favorable view for a particular industry or sector or business group in any manner. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and take professional advice before investing. Such representations are not indicative of future results.
• There are either no material conflict of interests or all existing and potential conflict of interest are disclosed herein.

Regulatory disclosures

Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).

Registration granted by SEBI and certification from NISM in no way promise or guarantee that the research recommendation will provide any assured, minimum or risk-free return to the investors.

The research report serves as general information and does not account for individual investment goals, financial situations, or needs. Minerva Capital Research Solutions strives to provide reliable and comprehensive information, sourced from what are believed to be trustworthy channels. However, this information has not been independently verified by Minerva Capital Research Solutions or its analysts, and no guarantees are made regarding its accuracy or completeness.

The opinions expressed in this report reflect the views of the research analyst at the time of publication and may change over time. Minerva Capital Research Solutions and its affiliates as on date of publication of this report may or may not hold any positions in the securities discussed. The views presented are general and do not consider individual risk tolerance or investment objectives; therefore, readers should seek independent professional advice before making investment decisions.

Minerva Capital Research Solutions does not guarantee a favorable outlook for any specific industry or sector and urges investors to consider all relevant risk factors, including their financial circumstances, before investing. The analyst certifies that their views accurately represent their personal opinions on the companies discussed and that no part of their compensation is tied to specific recommendations made in the report.

This material should not be interpreted as an offer or solicitation to buy or sell securities in jurisdictions where such offers would be illegal. Consequently, brokerage and investment services described herein are not available to Canadian or U.S. persons. Distribution outside India requires prior written consent. This Research Report assumes that the recipient will assume all risks associated with its contents. If there are any disagreements or dissatisfaction with this report or its disclaimer, the only recourse is to cease using it. Minerva Capital Research Solutions and its affiliates will not be liable for any direct or indirect losses resulting from the use of this report. Recipients are required to adhere to these restrictions. The material is for the personal use of authorized individuals and does not constitute a solicitation or offer to buy or sell any securities in jurisdictions where such actions would be illegal.

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%