CitiusTech, a healthcare technology and consulting platform backed by Bain Capital Private Equity, showcased an exceptional leap in profitability during FY24, even as its revenue growth remained modest. The Mumbai-based company recorded a sixfold surge in profit, driven by streamlined expenses, including a notable reduction in consulting charges.
The firm’s revenue edged up by just 1% to ₹3,536 crore in FY24, compared to ₹3,498 crore in FY23, as per its consolidated financial statement filed with the Registrar of Companies. CitiusTech specializes in providing technology solutions, including consulting, engineering, and data-oriented software services, primarily catering to large healthcare organizations and hospitals. Its core software services, which form 98.8% of its operating revenue, grew 2.49% to ₹3,495 crore in FY24. However, revenue from software license sales and maintenance dropped sharply by 53% to ₹38 crore.
Adding to its topline, the company earned ₹15.7 crore from non-operating activities, pushing its total revenue to ₹3,551 crore in FY24.Employee benefits constituted the largest expense for CitiusTech, accounting for 75% of total costs, rising by 4.2% to ₹2,226 crore in FY24. Depreciation expenses climbed 6.2% to ₹136 crore, while consulting charges saw a 7.53% decline, settling at ₹299 crore. Overall, the company’s expenses increased marginally by 3.31% to ₹2,968 crore, compared to ₹2,873 crore in FY23.
This efficient cost management significantly boosted CitiusTech’s profit after tax (PAT), which soared to ₹350.28 crore in FY24 from ₹55.5 crore in FY23. The company achieved a return on capital employed (ROCE) of 37.67% and an EBITDA margin of 20%. On a unit basis, it spent ₹0.84 to earn a rupee during the fiscal year.
Strategic Challenges and Future Goals
Despite the robust bottom-line performance, the company faces challenges in meeting its ambitious revenue targets. CitiusTech had aimed for ₹4,100 crore in revenue by September 2023 and is eyeing the $1 billion mark by FY28. To achieve these milestones, it may explore strategic acquisitions to accelerate growth.
Currently, CitiusTech holds ₹458 crore in cash reserves and ₹1,232 crore in current assets, providing it with a solid foundation for expansion. With Baring Private Equity acquiring the firm for $955 million in 2022, the company may also consider an IPO as a potential growth avenue in the coming years.