Physicswallah shares jump 10% post Q2 show: Can earnings sustain momentum?

Physicswallah posted its highest-ever quarterly revenue of ₹1,242 crore, up 18.2 per cent year-on-year (YoY), and its consolidated profit doubled, rising 106 per cent YoY to ₹144 crore.

We see significant upside potential from sustained earnings delivery, said MOFSL on Physicwallah.

Saloni Goel New Delhi

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Physicswallah share price: Shares of ed-tech platform Physicswallah gained 10 per cent in Thursday's intraday deals after it posted a record show for the second quarter of the fiscal year 2026-27 (Q2 FY27), although offline performance was subdued as NEET business lagged when compared to last admission cycle given delay in results cycle.

Physicswallah's share price rose to the day's high of ₹140 on the BSE, up 9.85 per cent against the last close of ₹127.45. The stock pared half of its gains and was last trading 4.4 per cent higher at 133.05 around 11 AM. Trading activity remained high as 27.8 million shares changed hands so far on BSE and NSE combined.

The stock listed on the bourses on November 18 last year and trades 28 per cent above the offer price of ₹109 based on the day's high. So far this year, its performance has been lacklustre as it trades largely unchanged.

Physicswallah Q2 results

Physicswallah posted its highest-ever quarterly revenue of ₹1,242 crore, up 18.2 per cent year-on-year (YoY) and its consolidated profit doubled, rising 106 per cent YoY to ₹144 crore.

Online revenue grew more than expected by 26 per cent to ₹694 crore in Q2, while offline revenue missed estimates as it grew 9 per cent to ₹541 crore.

"While the online business has been able to manage the impact, the high dependence of Xylem and VidyaPeeth on NEET is resulting in slower-than-expected growth in the offline business. That said, we expect the offline business to be near breakeven this year, with the company turning PAT-positive in FY27," said Motilal Oswal Financial Services (MOFSL).

Going ahead, the company retained its full year growth guidance of ~30 per cent with a built-in cushion of buy-outs ($20 million has been earmarked).

Should you buy Physicswallah shares?

While FY27 growth is likely to be relatively subdued due to the disruption in the NEET cycle, analysts see expansion into new categories like online K-12, early learning and upskilling to drive long-term growth.

These newer categories, which generally command higher ASPs, should support growth and reduce dependence on core JEE/NEET preparation, said MOFSL in a note. "We expect these initiatives to drive ~30 per cent revenue CAGR over the next three years, with further upside potential from a successful expansion into Southern India," it added.

PL Capital cut the pre-IND AS EBITDA estimates by 2 per cent and 3 per cent for FY28E and FY29E, respectively, as it fine-tunes growth assumptions for the offline business. Overall, led by new initiatives, it expects revenue and pre-Ind AS EBITDA to log 25 per cent/66 per cent CAGR over FY26-29E.

"The stock trades at 37x/23x over our pre-Ind AS EBITDA (adjusting for ESOP cost) estimate for FY28E/FY29E. Retain ACCUMULATE with a SoTP-based TP of ₹140," said the brokerage.

On the other hand, MOFSL has a more optimistic target of ₹200. "Short-term fluctuations aside, we expect Physicswallah to generate ₹2160 crore of pre-Ind AS EBITDA by FY30, driven by a 25-30 per cent revenue CAGR and expanding margins. Its mature categories are already delivering EBITDA margins of ~50 per cent, while the asset-light business model offers significant operating leverage as the business scales. We see significant upside potential from sustained earnings delivery," it argued.