Medinova Diagnostic Services Ltd Management Discussions

Growing population is creating a large and expanding market for diagnostic services. In addition, the rising number of people aged over 40, who are more likely to avail diagnostics services, is increasing the need for regular health checks and disease management. This change highlights how important diagnostic testing has become, acting as a key part of both preventive care and ongoing treatment.

Growing awareness about the importance of early diagnosis for conditions such as cancer, diabetes, and cardiovascular diseases is driving demand for diagnostic tests. Preventive healthcare initiatives by governments and insurers also promote regular diagnostic testing.

Demand for personalized treatment plans is pushing the need for companion diagnostics that match patients with specific therapies. Genetic and molecular diagnostics are becoming integral in tailoring treatments for conditions like cancer and rare genetic disorders.

The global rise in aging populations leads to a higher incidence of chronic diseases, which increases the need for regular and complex diagnostic tests.

Threats

Strict regulatory approval processes (e.g., by FDA, EMA) can delay the launch of new products. Compliance with evolving international standards and local regulations can be complex and costly.

Developing innovative diagnostic technologies involves high investment and long lead times, with no guarantee of commercial success. Smaller companies may struggle to compete or bring products to market due to capital constraints.

Cost-containment efforts by healthcare systems and insurers may lead to reduced reimbursement rates or pressure to lower test prices. Inadequate insurance coverage for advanced tests can limit their accessibility and commercial viability.

The industry is highly competitive, with large multinational corporations dominating the space and constantly innovating. Market saturation in some segments (like routine blood tests) puts pressure on profit margins.

Outlook

A strong focus on adhering to the highest quality standards and aligning with medical accreditations will remain the key focus of the Company, such that its reputation as a reliable and accurate diagnostic in India. Along with this, consistent efforts are made to improve the experience it offers to its patients by making the entire process smoother and convenient. The Company focuses on improving its overall operational efficiencies through implementing cost reduction strategies, improving the IT system and delivering quicker test results.

Risks and concerns

Competition Risk: The Company faces intense competition from new players including large conglomerates, hospital chains, pharma companies, health tech platforms and startup companies, which may weaken the outlook, slow down growth, and put price pressures to bring margin and return ratios under stress. To mitigate this risk, the Company emphasizes redefining its cost-base to neutralize some of the stress on returns.

Technological Risk: The Company operates in a highly technology-driven market. Technological advancements in the field may result in a decline in demand for the Companys products and services. To mitigate this risk, the Company focuses on offering tests which are more accurate and economical, as compared to those available in the market.

Skilled Manpower Shortage Risk: The Companys success depends on its ability to find and retain outstanding employees, and failing to do so could significantly harm its performance. To mitigate this risk, the Company focuses on an engaging HR practice and strives to make it a desirable place to work.

Internal control systems and their adequacy

The Company has an efficient internal control system in place. The policies and procedures, covering financial and operating functions, are also documented. The system controls are designed to provide reasonable assurance for maintaining proper accounting records. This reinforces reliability of financial reporting, monitoring of operations, and protection of assets from unauthorized use or losses and compliance of regulations.

The scope and coverage of audits include: Reviewing and reporting of key process risks Adhering to operating guidelines and statutory compliances

Recommending improvements for monitoring and enhancing efficiency of operations Ensuring reliability of financial and operational information

The Audit Committee periodically monitors and reviews the significant internal audit observations. It also reviews compliance with accounting standards, risk management and control systems.

Human Resource

‘Human Resources are recognized as a key pillar of any successful organization and so is for Medinova. The company puts constant efforts in recruiting and training the employees and ensures to bring out the best of them. The company adopts an HR policy and ensures that all the employees are aware of personnel policies. The needs of the employees are addressed with high importance and efforts are made to provide a highly challenging and healthy environment. Besides all these, the company places high emphasis on professional etiquette required of every employee. As on March 31, 2025 the number of employees employed are 50.

Financial Performance of the Company

During the year under review, the Company generated a total income of 766.87 lakhs, reflecting a decrease of approximately 4.61% compared to 803.90 lakhs in the previous year. Despite the decline in income, the Company achieved a net profit after tax of 88.94 lakhs, marking an increase of approximately 18.16% over the net profit of 75.27 lakhs reported in the previous financial year.

During the year under review, the Company recorded a total income of 995.85 lakhs, representing a decrease of approximately 3.91% compared to 1,036.34 lakhs in the previous year. Similarly, the net profit after tax stood at 189.67 lakhs, which is approximately 5.11% lower than the net profit of 199.89 lakhs reported in the previous financial year.

Key Financial Ratios

In accordance with the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key financial ratios. The company has identified the following ratios as Key Financial Ratios:

*Since the total equity is negative, ratio is not given. **Net worth of the company is negative.

Cautionary statement

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward-looking statements within the meaning of applicable laws and regulations. Such statements represent the intention of the Management and the efforts being put into place by them to achieve certain goals. These assertions are predicated on a number of assumptions and future activities. Since the Companys operations are impacted by several internal and external factors outside of its control, actual results could significantly differ from those stated or inferred. Any forward-looking statement published here only speaks as of the date it was made and only reflects the Companys current intentions, beliefs, or assumptions. The Company disclaims any obligation to update or modify any forward-looking statements, whether as a result of new data, unexpected developments, or other factors. Readers are urged to use their best judgement when determining the risks connected to the Company.