PhysicsWallah Coverage Initiated by Axis Capital

PhysicsWallah has recently gained attention as Axis Capital has commenced coverage with an Add rating along with a price target set at Rs 138. This Add rating signals expectations that the stock will yield returns comparable to or better than the broader market over the medium to long term.

Growth Drivers for PhysicsWallah

In its initiation note, the brokerage highlighted the increasing demand for admission into prestigious educational institutions and government positions, alongside the limited availability of seats, as significant factors fuelling long-term growth for test-preparation companies like PhysicsWallah. This ongoing demand trend affirms the company’s commitment to providing affordable education at scale.

Key Strengths of PhysicsWallah

Axis Capital underscored the extensive organic student base of PhysicsWallah, which has been primarily developed through its robust online platform and YouTube channel. This organic growth channel enables the firm to maintain low customer acquisition costs and offer courses at lower rates than many of its competitors, thus creating a significant competitive advantage in the increasingly crowded edtech landscape.

Challenges in Offline Expansion

While PhysicsWallah’s online operations remain its stronghold, Axis Capital also identified hurdles in profitably scaling the offline segment. The offline business, which started to expand significantly from FY23, encounters tough competition from established coaching institutions as well as local contenders. Furthermore, pricing power is constrained, and student outcomes are becoming more pivotal than affordability in the offline education space.

Recent Developments

Recently, PhysicsWallah made headlines by approving the acquisition of an additional 12.29% stake in its subsidiary Xylem Learning, raising its total ownership to 77.27%. On the financial side, the company experienced a remarkable growth in its operating revenue, which surged by nearly 26% to reach Rs 1,051.26 crore in Q2 FY26, up from Rs 832.17 crore in the corresponding period last year. Additionally, the profit saw a substantial increase of 70%, amounting to Rs 69.7 crore. The Q3 FY26 results are yet to be announced by PhysicsWallah.