Modern Diagnostic & Research Centre Limited

Healthcare — Diagnostics & Research · BSE

₹64.00₹0.00 (0.00%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Very High

Driven by moderate debt load, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:57 pm

Understanding the Business

Company site ↗

The 60-second version of Modern Diagnostic & Research Centre Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Modern Diagnostic & Research Centre Limited provides diagnostic and related healthcare tests services to individuals, healthcare institutions, doctors, corporates and other institutional customers in India.

IndustryDiagnostics & Research

SectorHealthcare

Employees616

Annual revenue₹83 Cr

How does it make money?

Turns over ₹83 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 616 employees supports ₹13.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹13.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, CIPLA LTD, DR. REDDY S LABORATORIES, APOLLO HOSPITALS ENTER. L. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 11.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +48% while net margin moved -162% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+48%

Margin effect-162%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

56/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

18.4x

Sector Median

33.3x

median of 4 sector peers

🟢Against its sector it trades 45% below the peer median of 33.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

33.3x median of 4 peers · -45%

vs. generic bands

Fair

15x–35x

EV/EBITDA

9.1x

PEG

0.87

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -1.1% to 16.5% over 3 years.
Return on equity is rising
ROE has improved from -96.1% to 9.0%.
Return on capital is rising
ROCE has improved from -29.7% to 11.2%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

6 items require attention · 2 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 142% over 3 years, from ₹15 Cr to ₹37 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 264% against revenue up 48% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 7.9x to 3.5x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹20 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 96% against revenue up 48% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 1.00 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -1.1% to 16.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 45% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 96% against revenue up 48%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.9% CAGR
Latest reported year was 13.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 16.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹20 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.5x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹97 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.4x

Fair

Fairly valued against the generic band

P/B Ratio

1.65x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹3.48

Profitable

Profitable on a per-share basis

ROE

13.2%

Moderate

Moderate capital efficiency

ROCE

11.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.28x

Moderate

Moderate leverage

Revenue Growth (YoY)

13.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

21.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹23 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

5.6%

Average

Average asset productivity

Operating Margin

21.3%

Good

Healthy core-business profitability

Net Margin

6.3%

Average

Average bottom-line conversion

Current Ratio

1.00

Adequate

Adequate, but no real cushion

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

71.6 / 62.0

Bullish alignment (short > long)

RSI (14)

25.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹56 Cr	₹67 Cr	₹78 Cr	₹83 Cr	+13.9%
EBITDA	-₹1 Cr	₹13 Cr	₹19 Cr	₹14 Cr	—
EBITDA Margin	-1.1%	18.9%	24.3%	16.5%	—
PAT (Net Profit)	-₹6 Cr	₹6 Cr	₹9 Cr	₹5 Cr	—
EPS	₹-3.8	₹3.84	₹5.97	—	—
ROE	-96.1%	49.3%	43.4%	9.0%	—
ROCE	-29.7%	34.0%	45.0%	11.2%	—
Total Debt	₹15 Cr	₹20 Cr	₹22 Cr	₹37 Cr	+34.3%
Free Cash Flow	-₹3 Cr	-₹3 Cr	₹1 Cr	-₹20 Cr	—

🟢 Revenue has grown at 13.9% a year over 3 years.

🟢 EBITDA has turned positive, from -₹1 Cr to ₹14 Cr.

🟢 EBITDA Margin has risen from -1.1% to 16.5% over 3 years (+17.6 pts).

🟢 PAT (Net Profit) has turned positive, from -₹6 Cr to ₹5 Cr.

🟢 ROE has risen from -96.1% to 9.0% over 3 years (+105.1 pts).

🟢 ROCE has risen from -29.7% to 11.2% over 3 years (+40.9 pts).

🔴 Total Debt has grown at 34.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹119 Cr

Total Liabilities

₹60 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹24 Cr

Shareholding (proxy)

Institutional Holding

1.4%

Insider Holding

87.3%

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
CIPLA LTD	31.8x	9.8%
DR. REDDY S LABORATORIES	31.0x	8.8%
APOLLO HOSPITALS ENTER. L	54.3x	22.0%

Recent News

1 mixed5 general

Modern Diagnostic & Research Centre submits voting results of 14th AGM

scanx.trade, 30 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Modern Diagnostic IPO shares see double-digit GMP ahead of its market debut

Moneycontrol.com, 06 Jan

Modern Diagnostic shares list at 11% premium over IPO price on BSE SME platform

The Economic Times, 07 Jan

Modern Diagnostic & Research Centre IPO pens on December 31, 2025

Express Healthcare, 30 Dec

MDRC Stock Price and Chart — BSE:MDRC

TradingView, 07 Jan

Modern Diagnostic and Research Centre share price: Stock lists at over 10% premium on BSE SME; here's how much investors made

Upstox, 07 Jan

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Profitability · Valuation

WeakFinancial Health · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑