Digital healthcare platform Practo failed to sustain its growth trajectory in FY23 as its scale dipped marginally as compared to FY22 when its revenue spiked almost 2X. However, the firm has cut down losses by 58%.
Practo’s revenue from operations decreased 3.2% to Rs 204.4 crore in FY23 from Rs 211.2 crore in FY22, according to its consolidated financial statements filed by the group company (Practo Pte Ltd) in Singapore.
Founded in 2008, Practo connects doctors with patients and offers several ancillary services such as telemedicine, pathology, and medicines. Income from diagnostic and consulting services formed 50% of the total operating revenue. This collection grew 9.7% to Rs 102 crore in FY23.
The rest of the income comes from subscription services, the sale of software and maintenance offered to doctors and clinics, and other operating activities. Practo has a total of 12 subsidiaries across India, the United States of America, the Philippines, Malaysia, Indonesia, Brazil, Mexico, and Chile.
See TheKredible for a detailed revenue breakup.
Caveat: We have not included the finance income while calculating the revenue for Practo.
Similar to most technology startups, the cost of employee benefits accounted for 49% of the company’s overall expenditure. This cost surged 37.3% to Rs 170 crore in FY23 from Rs 124 crore in FY22 which also includes Rs 22.5 crore as ESOP that was settled in equity (non-cash component).
- Purchase of materials
- Employee benefits
- Consultation and surgery
- Professional services
Its consulting, surgery, professional services, advertisement cum promotion, procurement of materials, and other overheads took the overall expenditure to Rs 345.6 crore in FY23 as compared to Rs 452.6 crore in FY22.
Head to TheKredible for a detailed expense breakup.
Heavy cuts in advertisements and consultation costs helped Practo to reduce its losses by 58% to Rs 99.4 crore in FY23 from Rs 236.5 crore in FY22. Its ROCE and EBITDA margin improved to -37% and -39% respectively.
|Expense/₹ of Op Revenue
On a unit level, it spent Rs 1.69 to earn a rupee in FY23.
Practo’s seems to be a classic case of an early mover that has been overtaken by a changing landscape across its market. Celebrated as one of the best examples of digital innovation in the sector when it started in 2008 , the company today faces an existential crisis, as other service providers have followed it and even improved on most of its offerings for the market. Like many early movers, Practo has found it difficult to accept and adapt in a changing market, making it an almost fringe player from the category defining firm it set out to be. In the winner takes all stakes that most digital markets are designed for, Practo seems to have missed its chance, and will do well to attract a stronger partner that values its experience, network and brand soon.