Summary:
PhysicsWallah shares jumped up to 9% after Q1 FY27 results showed a sharp reduction in net loss and 24.4% YoY revenue growth. Net loss narrowed to ₹77.57 crore, while EBITDA loss fell significantly to ₹44.2 crore, indicating improving profitability. K-12 and early-learning enrolments rose 41%, supporting growth in the online segment. Management retained its 30% FY27 revenue growth guidance and expects the company to achieve PAT profitability in Q3 FY27.
PhysicsWallah shares jumped as much as 9% to ₹128.37 in morning trade on August 17 after the edtech firm reported a contraction in its consolidated net loss for Q1FY27. The stock opened at ₹114.65 and turned positive on the day. At 10:44 AM, the shares were trading at ₹124.65, up ₹7.53 or 6.43%, compared to the Nifty 50, which was down 0.24% at 24,307.
PhysicsWallah reported a consolidated net loss of ₹77.57 crore for Q1FY27 against ₹120.45 crore in the same quarter last year. Its revenue from operations jumped 24.4% YoY to ₹1,053.95 crore from ₹847.09 crore while sequentially it grew 14.7% to ₹1,053.95 crore from ₹918.80 crore. Its net loss, however, widened slightly to ₹77.57 crore from ₹74.89 crore in the previous quarter.
Its total expenses also rose 18% YoY to ₹1,247 crore in Q1FY27 from ₹1,054.2 crore a year ago. Its expenses in the previous quarter stood at ₹1,035.2 crore.
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Online and Offline Segments
The firm’s online coaching and book sales segment contributed ₹548.79 crore to its revenue while its offline segment comprising classroom coaching and hostel services added ₹489.90 crore to the revenue.
The online K-12 and early learning segment continues to witness demand with enrolments jumping 41% YoY to 780,000 from 550,000. Its revenue from this segment also rose sharply by 88% YoY to ₹105 crore from ₹56 crore.
The NEET exam cycle got delayed this year which led to reduced enrolments in NEET for the first quarter. The company expects a pickup from July after the results were out and the new cycle had begun.
EBITDA Loss Narrows
PhysicsWallah’s EBITDA loss also narrowed sharply to ₹44.2 crore for Q1FY27 from ₹88.7 crore in Q1FY26. Its EBITDA margin improved by around 628 basis points YoY to -4.2%.
The firm reported a sharp cut in its employee benefits expense excluding ESOP as a % of revenue by around 260 basis points to ~46.4%, despite a sequential increase of 18% YoY.
Why PhysicsWallah Shares Jumped
Physicswallah shares jumped after the results as the investors reacted positively to a sharp fall in losses, a surge in revenue, and an improvement in EBITDA. The company maintained its FY27 consolidated revenue growth guidance of around 30%.
The upgrade in the outlook by the analysts also helped the stock as they raised the target price to ₹140 citing improved fundamentals and correction after peaking at ₹158. The target suggests almost 20% upside from the previous close of ₹117.12.
PhysicsWallah also announced the divestment of FinZ, which will help allay fears about capital allocation, and expects the group PAT to be profitable in Q3FY27. The management guided that Q3 is its biggest quarter.
Outlook
The online segment is expected to drive growth for the company as it witnesses demand in K-12 and early learning, vernacular, and newer categories, along with improvement in monetisation and profitability. The NEET enrolment is expected to improve further in the next cycle after the delayed exam.
With a strong revenue growth, a dip in losses, and management’s guidance for PAT profitability in Q3FY27, the investors will be watching the enrolment growth, collections, margins, and whether the company can maintain its FY27 guidance.
