Practo Achieves Positive Adjusted EBITDA, Sustains Efficiency Momentum into FY25
Healthtech startup Practo has reached a significant milestone by turning adjusted EBITDA positive in the fourth quarter (Q4) of the financial year 2023-24 (FY24). The company has announced that it is on track to maintain this positive momentum for the entire fiscal year of FY25. This achievement highlights Practo’s strategic focus on core business areas and operational efficiencies, which have driven substantial improvements in its financial performance.
Significant Financial Turnaround
Practo reported a remarkable 90% reduction in its adjusted EBITDA loss for the entire FY24, narrowing the loss to INR 17 Cr from a substantial INR 162 Cr in the previous year. This turnaround is a testament to the company’s concerted efforts to optimize its business model and streamline operations. By concentrating on its core business areas, Practo achieved a 68% Compound Annual Growth Rate (CAGR) in reducing its adjusted negative EBITDA, demonstrating its ability to implement effective cost-control measures and enhance revenue streams.
Enhanced Contribution Margins and Revenue Growth
In addition to reducing its adjusted EBITDA losses, Practo also significantly improved its contribution margins. The company’s contribution margins rose to 40% in FY24, a stark improvement from the negative -1% recorded in FY22. This positive shift reflects enhanced operational efficiencies and the company’s ability to generate higher value from its core operations. The increased margins indicate that Practo has successfully managed to optimize its cost structure while boosting its revenue-generating capabilities.
Practo’s revenue also saw a substantial increase during the fiscal year under review. The startup clocked a 22% growth in revenue, with absolute revenue figures rising to INR 242 Cr in FY24 from INR 195 Cr in the previous year. This revenue growth underscores the effectiveness of Practo’s strategic initiatives aimed at expanding its market presence and enhancing its service offerings. The company’s focus on delivering high-quality healthtech solutions has resonated well with its customer base, driving higher adoption rates and revenue.
Strategic Initiatives and Core Business Focus
Practo’s impressive financial performance can be attributed to its sharp focus on core business areas and strategic initiatives. By prioritizing key segments of its operations, the company has been able to streamline its processes and reduce inefficiencies. This strategic approach has not only improved financial metrics but also positioned Practo as a leading player in the healthtech industry.
The company’s ability to reduce its adjusted negative EBITDA significantly while simultaneously enhancing its contribution margins indicates a robust business model capable of sustainable growth. Practo’s emphasis on operational efficiency and cost management has played a crucial role in achieving these milestones.
Future Outlook
Looking ahead, Practo is poised to maintain its positive adjusted EBITDA momentum in FY25. The company’s strong financial performance in FY24 provides a solid foundation for future growth and profitability. By continuing to focus on its core business areas and implementing strategic initiatives, Practo is well-positioned to capitalize on emerging opportunities in the healthtech sector.
Practo’s journey towards financial stability and growth serves as an inspiration for other startups in the healthtech industry. The company’s ability to navigate challenges, optimize operations, and deliver value to its stakeholders underscores its commitment to excellence and innovation.
Conclusion
Practo’s achievement of turning adjusted EBITDA positive in Q4 FY24 and maintaining this positive trend for the full year reflects its strategic focus on core business areas and operational efficiencies. The significant reduction in adjusted EBITDA losses, coupled with improved contribution margins and revenue growth, highlights Practo’s robust business model and effective cost management strategies. As the company continues to build on this momentum, it is well-positioned to achieve sustained growth and profitability in the healthtech sector.4o
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