Practo aims to turn profitable in FY24, targets 50% revenue growth

Bengaluru-headquartered digital healthcare firm Practo is eyeing a 50 per cent revenue growth in financial year 24 (FY24) and also aims to turn profitable after 15 years of its inception. In financial year 23 (FY23), the company already reduced its losses by 50 per cent to Rs 93.68 crore from Rs 211.86 crore in FY22.

It is also planning an offline presence in primary and secondary healthcare through Practo-branded clinics.

Practo’s co-founder and chief executive officer Shashank ND said that they have been focusing on profitability and so far in FY24, they have been cash flow positive.

In FY23, the company’s revenue growth was 3 per cent year-on-year to Rs 194.53 crore from Rs 188.9 crore in FY22, but there was a 39 per cent improvement in Ebitda. The company’s gross margins have also consistently improved – from 54 per cent in FY21 to 70 per cent in FY23.

Revenues had grown by 100 per cent year-on-year in FY22, which was also a Covid-19-hit year, and online consultations were at their peak. Shashank said that online doctor consultations had grown by over 100 times during Covid-19, and even now they are 15 times more than the pre-Covid levels.

Practo is an integrated healthcare company that connects patients, doctors, surgeons, clinics, hospitals, pharmacies, and diagnostics. From finding and booking an appointment with verified doctors, to online doctor consultations, to getting medicines delivered and lab tests conducted at home – it offers various services for the patient. It also provides health plans to corporate and secondary healthcare providers, besides creating software products that assist healthcare providers like clinics and hospitals.

The software business accounts for nearly 15 per cent of Practo’s revenues and it has a client base of 20,000 clinics and hospitals; the doctor-patient consult through doctors on the Practo platform (full-stack healthcare) contributes around 35 per cent; and the doctor appointments booked on Practo account for 50 per cent of revenues.

Shashank explained that they onboard doctors after due diligence and also train them before they can tele-consult patients. The patient pays Practo, which, in turn, pays the doctors. There are around a couple of thousand such doctors on its platform, and this service is termed full-stack healthcare service by the firm. While this is a new vertical, it has already grown to contribute 35 per cent of the revenues, Shashank said, and thus they are focusing on this vertical.

Meanwhile, the platform already has 150,000 doctor partners, and around 1.7-1.8 million visitors come to its platform every year. It is present across 720 cities, 13,900 pin codes across 20 countries. About a million appointments are booked every year on the platform.

Shashank said that about 90 per cent of its monthly active users come organically due to the brand that has been built over 15 years. This saves the cost of customer acquisition and aids margins.

Now the firm is also focusing on integrating with the Ayushman Bharat Digital Mission (ABDM), besides taking the doctor partner count to 200,000 and also having an offline presence through Practo-branded clinics.

While Shashank did not divulge the investment per clinic, he said that they would offer both out-patient and in-patient options. He added that the company is generating cash, and thus these initiatives could also be funded internally. It aims to start with clinics in 10 cities and then scale it up to 60-65 cities in the next 4-5 years.