Physicswallah Ltd. shares experienced a 1.47% increase from the previous close of ₹119.97, with the latest trading price at ₹121.95. The small cap company, incorporated in 2020, operates in the Services sector with a market capitalization of ₹34,801.94 crore. From its 52-week high of ₹161.99 seen in November, the stock is down 25%, prompting experts to recommend a hold strategy with specific risk management.
Physicswallah's Q1FY27 performance showed resilience despite significant NEET disruption that affected both collections and enrolments. The examination and result schedule was pushed back by 5-7 weeks, with offline revenue consequently growing 14.5% but management estimates that growth would have been around 22-25% under normal exam calendar conditions. Since July, offline NEET enrolments have increased 82% year-on-year, while online NEET collections rose 51% between 1 July and 13 August after declining 28% in Q1. This creates a favourable comparison for Q2FY27, though the recovery still needs to translate into recognised revenue and improved centre-level profitability.
Online business remained the key driver with revenue rising 33.2%, aided by traction in K-12/Early Learning, vernacular and newer categories. K-12 and early-learning revenue increased 88% to ₹105 crore, with enrolments rising 41%. NEET PG collections doubled, while CA, CS and ACCA enrolments grew 30%. The company's Average Collection Per User (ACPU) increased 10% to ₹4,312, indicating some improvement in monetization. However, growth is becoming less dependent on traditional JEE and NEET categories, with several newer categories still requiring investment and yet to reach profitability of mature online offerings.
By consistent performance of the online business, pre-Ind AS EBITDA rose 168% to ₹67 crore, lifting the margin to 12.2%. The company demonstrated strong financial performance in FY26 with revenue increasing 35% to ₹3,900 crore and EBITDA growing nearly threefold to ₹300 crore. Cost control needs to be sustained as growth investments continue, with employee costs excluding ESOPs declining as a percentage of revenue, while advertising and promotion expenses increased only 9% despite 24.4% revenue growth. AI-led automation has also started contributing to people-cost efficiencies.
According to JM Financial Institutional Securities, the company's decision to exit FinZ addresses earlier capital-allocation concerns. The company is exiting FinZ and intends to focus capital on online content and selective acquisitions, while offline expansion will remain dependent on centre-level economics. SEBI-registered research analyst Anik Mitra has set an ambitious target of ₹170-185 for Physicswallah shares over the next two quarters, implying an upside potential of 36-48% from the current market price of around ₹125. The management has guided for 30% top-line growth and expects the company to become EBITDA- and PAT-positive by FY27.
