Healthcare and diagnostics app Practo, backed by Tencent, is gearing up to achieve profitability in the upcoming fiscal year. The company, founded in 2008, has set its sights on an initial public offering (IPO) and is already cash flow positive, according to its co-founder and CEO, Shashank ND.

In a recent interview with PTI, Shashank highlighted Practo’s positive trajectory, stating, “This year we will grow by a good healthy margin… Our EBITDA would have improved dramatically from last year. We will be near break-even this year, and next year is when we really will be able to show significant profits.” The Bengaluru-based startup has shown promising financial indicators, with a substantial reduction in losses to Rs 93.68 crore in the 2022-23 fiscal year, halving its losses compared to the previous period.

Practo’s revenue stream diversification has been a key factor in its financial success, with income from diagnostic and consulting services constituting 50% of the total operating revenue. The company’s revenues saw a 3% year-on-year growth, reaching Rs 194.53 crore, while Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) improved by 39%.

The company’s strong financial position is attributed to its focus on connecting doctors with patients, offering telemedicine services, and exploring ancillary services. With backing from Tencent and other venture capital funds, Practo is also eyeing an offline presence in primary and secondary healthcare through Practo-branded clinics.

Shashank emphasized Practo’s commitment to expanding its footprint in smaller cities and towns, leveraging artificial intelligence (AI) to enhance data analysis and deliver improved healthcare outcomes. Practo aims to deepen its penetration in Tier and Tier 3 cities, building on its existing market share in major urban centers.

While acknowledging Practo’s success in the big cities, Shashank outlined the next phase of growth, stating, “Now we believe that the next phase is to create a more omni-channel approach where online and offline, you know, kind of go hand in hand.” The company connects approximately 15 crore people annually with doctors in India, with more than 50% of its business coming from 6-7 top cities.

The imminent IPO is a significant milestone on Practo’s horizon, with Shashank expressing the company’s desire to go public soon. Although specific timelines were not disclosed, he stated, “I do see the company going public soon, but I don’t think there’s any particular timeline for it. Two years, three years from now, we need to see.”

Practo’s expansion plans align with the government’s initiatives in the agriculture sector, with substantial investments and subsidies allocated for the deployment of agri-drones. The company holds approvals from several state governments, including Tamil Nadu, Maharashtra, and Kerala, for subsidies on its agricultural drones. Practo aims to capitalize on the government’s push towards the use of drones in agriculture, addressing issues such as crop health monitoring, soil analysis, disease surveillance, and pesticide spraying.

With a 55% market share in the agricultural drone industry, Practo values itself at $250 million. The company has raised $27.3 million across six funding rounds since its inception and received a fresh bridge round of Rs 25 crore in October 2023. The funds will contribute to meeting working capital requirements as Practo accelerates its IPO plans and expands its operations.

Shashank highlighted Practo’s focus on strengthening its existing businesses and staying within the provider side of the healthcare space, emphasizing the vast opportunities in the private providers’ segment, estimated to be a $100 billion space in India.

As Practo navigates its journey towards profitability, AI integration, and an IPO, the company stands as a notable player in India’s healthcare and technology landscape, contributing to the transformation of healthcare delivery and accessibility across the country.

By Admin

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