Practo eyeing profitability next fiscal; plans IPO soon

Tencent-backed healthcare and diagnostics app Practo is eyeing profitability in the upcoming fiscal year and plans to venture into the stock exchange with an initial public offering (IPO) soon, according to Shashank ND, the co-founder and CEO.

The company's strategic focus involves broadening its presence in smaller cities and towns while harnessing the power of AI to revolutionise healthcare analytics and outcomes.

Shashank outlined Practo's current financial status, mentioning that it's already experiencing positive cash flows. He anticipates substantial growth this year, with a remarkable improvement in EBITDA (earnings before interest, taxes, depreciation, and amortisation) nearing the breakeven point, paving the way for significant profits in the following fiscal year.

Founded in 2008, Practo serves as a platform connecting doctors and patients, offering various services, including telemedicine. Notably, diagnostic and consulting services contribute 50 percent to its operational revenue. The firm managed to halve its losses to Rs 93.68 crore in the fiscal year 2022–23 while observing a 3 percent year-on-year revenue growth to Rs 194.53 crore and a 39 percent enhancement in EBITDA.

In addition to its primary offerings, the company generates revenue from subscription services, software sales, and maintenance provided to doctors and clinics.

Future plans for Practo encompass achieving full-year profitability in the next fiscal year, sustaining growth, and ensuring exceptional service delivery through a comprehensive model.

Supported by Tencent, Peak XV Partners, and Matrix Partners, Practo is also considering offline expansions in primary and secondary healthcare by establishing Practo-branded clinics.

An IPO remains on the horizon as the company aims for a public listing, although specific timelines haven't been disclosed. The CEO envisions Practo going public in the near future, emphasising the importance of prioritising the domestic market by expanding operations across various geographies.

With a strong presence connecting around 15 crore people annually with doctors in India, Practo's focus now shifts towards extending its reach to Tier 2 and Tier 3 cities and towns, leveraging both online and offline channels.

Shashank highlighted the transformative potential of AI in healthcare, emphasising its role in improving data analysis and enhancing quality in the sector.

While the company stands well capitalised with approximately USD 230 million raised through multiple funding rounds, Practo's immediate focus lies on strengthening existing businesses rather than venturing into additional verticals like diagnostics.

Stressing the vast potential in the provider segment of the Indian market, estimated at about USD 100 billion, Shashank underscored Practo's commitment to staying within this expansive space.

Practo, spanning multiple countries and aiding over 30 crore patients through a network of 1.5 lakh verified doctor partners, remains dedicated to consolidating and fortifying its core businesses in the healthcare provider domain.

(With PTI Inputs)