Our gross margin is at an all-time high, says Practo CEO Shashank N D

The last three years saw us fine-tune our business model and get closer to our vision of building quality health care for a billion Indians, said CEO N D

Healthcare platform Practo has come a long way to become a firm that generates 80 per cent of its revenue from B2C services, facilitating everything from appointments with doctors, online consultations, deliveries of medicines, to tests. In an interview to Bibhu Ranjan Mishra, co-founder and CEO Shashank N D says the sector requires a lot of patience. Edited excerpts:

Once tipped as a potential unicorn, Practo has been lying low in the past couple of years. What are the reasons?

The last three years saw us fine-tune our business model and get closer to our vision of building quality health care for a billion Indians. We have close to 180 million users. It’s important to talk about the role Practo has played at this difficult time providing access to quality health care 24x7. Trends indicate a strong affinity toward digitisation in health care. 

How has the pandemic impacted the industry and Practo?

The pandemic has made people realise how fragile our lives are. I think the new normal is people focusing more on prevention, keeping a close tab on their comorbidities, and investing more time and money on their wellbeing, and the health of their loved ones. The telemedicine industry has grown very fast in the past five-six months. There are now over 25,000 verified doctors who provide online consultations on Practo, a growth of over 10 times in just four months.

Though Telemedicine has been around for some time, it has limitations. What’s your view?

The last decade has shown us that health care is never an immediate impact domain. Innovation doesn’t happen overnight in this sector, but when it does, it has a lasting impact. The behavioural change is happening. Doctors and patients are more comfortable with consulting online. However, this will never replace physical consultations completely, and doctors are the best judges on which form works best for patients.

There are talks that Practo’s growth was impacted in past 2-3 years because it was not able to raise funds...

We have raised capital multiple times, but as a policy we no longer announce them. We have been very focused on building our products, services that we offer, and most importantly (improving) customer experiences. 

How far away are you from profitability?

We were near-profitable before Covid-19 hit. Insta, our hospital information management platform (HIMS) business, which largely operates in West Asia and international markets, has grown 3x post-acquisition in 2015. In fact, it is Ebit- and cash flow-positive. Further, our gross margin is at an all-time high, while burn is at its lowest (57 per cent reduction since FY18). Our positive unit economics, reduced cash burn, and good gross margins across products have not only boosted operating revenue but given us a solid financial runway for the next four years.

Reports also suggest that Practo may have seen valuation degrade significantly. What’s your stand on this? 

Valuations are (driven by) market forces that go up and down with time. What concerns us the most is: Are our consumers satisfied with our services? Are we able to impact more people? Are our users coming back to us for their health care needs? That’s more important to us and these are in our control. Health care is a long-term problem and you have to be patient in this sector.

Can Practo play a role in Covid-19 vaccination?

Absolutely. Practo offers the ability for information, dissemination, and access to services. It also depends on what the government’s framework will be. We can provide help with where the vaccination is available, and with distribution of vaccines. We are already helping people to get their Covid tests done at home with laboratory tie-ups.