Target: ₹125
CMP: ₹108.48
Physicswallah (PWL) has emerged as a significant player in India’s EdTech sector, transforming online test preparation with its cost-effective model, which combines both online and hybrid delivery methods. The company operates within a sizable addressable market projected to grow at a 29% compound annual growth rate (CAGR) from FY25 to FY30, potentially reaching valuations of $6 to $6.5 billion, according to Redseer. The margins for the online segment are anticipated to be quite attractive, with JP Morgan estimating a 30% margin by FY27.
PWL focuses on a promising test preparation market in India that is expected to expand at a 13% CAGR over the same period, reaching $23 to $25 billion, as per Redseer. The anticipated stabilization of PWL’s asset intensity indicates that growth in the online segment may bolster offline development. Increased utilization of offline centers is expected to contribute to achieving breakeven by FY27.
While the online segment demonstrates strong profitability and positive cash flow, the company’s offline centers and school businesses introduce additional potential for revenue diversification. Coverage is initiated with an Overweight rating and a price target for April 2026 set at ₹125. The valuation approach is based on a sum-of-the-parts (SOTP) analysis, primarily highlighting the online and hybrid test preparation business, assigned a valuation of 30 times EV/EBITDA. In contrast, the offline business is valued at a lower multiple of 10 times EV/EBITDA, with no current valuation ascribed to the school business, which could present added opportunities if scalability exceeds expectations.
Risks associated with the company include potential turnover among students and faculty, regulatory challenges, a possible slowdown in online growth, and any deeper foray into the K-12 education sector.
Published on April 22, 2026
