PhysicsWallah Limited, a leading EdTech player, has been recommended as a BUY call by Ventura Securities Limited in their recent IPO note dated November 11, 2025. With a robust and scalable omni-channel learning model and rapidly expanding user base, the company has demonstrated extraordinary revenue growth from Rs 772 crore in FY23 to Rs 3,039 crore in FY25. While profitability remains a challenge due to sustained losses, weakening margins, and high operating expenses, the company's aggressive expansion, strategic acquisitions, and innovative AI-based learning tools position it well for long-term market capture. Ventura suggests investors consider entry levels between Rs 103 to Rs 109 with upside targets, balancing strong growth prospects against inherent financial and competitive risks.

Company Profile and Business Model

PhysicsWallah Limited delivers scalable, affordable education primarily aimed at test preparation and upskilling. Founded by CEO Alakh Pandey and Prateek Boob, it melds online courses, offline centers known as Vidyapeeths, and hybrid Pathshala models to address a broad Indian education market. It leverages technology and AI-driven platforms like AI Shashank and PW Drona for personalized learning experiences. With 198 offline centers and 4.46 million paid users as of FY25, the company has entrenched a powerful pan-India presence, supplemented by acquisitions such as Xylem and Utkarsh Classes expanding regional and content footprints.

Financial Growth and Performance

The company has displayed formidable revenue growth — from Rs 772 crore in FY23 to Rs 3,039 crore in FY25 — underscoring rapid scale-up. However, sustained losses temper the financial narrative with Rs 1,131 crore loss in FY24 primarily due to non-cash remeasurement and Rs 243 crore loss in FY25, whilst EBITDA turned positive to Rs 73.5 crore suggesting operational improvement. The company’s net worth rebounded from negative Rs 861 crore in FY24 to positive Rs 1,945 crore in FY25, fueled by capital infusion and improved operational metrics. Cost structures remain hefty, with employee expenses at nearly 48.5% of sales in FY25.

IPO Details and Capital Deployment

The IPO aims to raise Rs 3,480 crore, comprising Rs 3,100 crore fresh issuance and Rs 380 crore offer-for-sale, priced between Rs 103 and Rs 109. The post-issue market capitalization is estimated at Rs 31,501 crore. Allocation is weighted towards qualified institutional buyers (≥ 75%), with non-institutional and retail investors allotted up to 15% and 10% respectively. Proceeds will fund capital expenditure across new offline and hybrid centers, lease payments for existing facilities, marketing (Rs 710 crore allocated), technology infrastructure upgrades, and inorganic growth, including acquisition of additional stake in subsidiaries.

Risks and Challenges

Several risks merit investor caution. The company is heavily reliant on its founders for strategic direction and operational continuity, posing key-person risk. Despite revenue spikes, ongoing losses and negative operating margins highlight profitability challenges. Regulatory approvals and ongoing litigations introduce uncertainty. The aggressive expansion strategy, while promising, demands tight cost control and margin management. A failure to attract and retain students, along with potential faculty turnover, could adversely impact growth and financial health.

Stock Levels and Price Outlook

Investors looking to enter should consider the IPO price band of Rs 103 to Rs 109 as an optimal buying range. The stock is poised for potential upside with target levels set between Rs 135 and Rs 145, representing an approximate 25% appreciation potential from the upper band. Conservative stop-loss placement near Rs 98 provides risk mitigation given market volatility and execution risks. This setup suits investors with a medium- to long-term outlook aiming to capitalize on sector expansion and company’s scalable business model.

Valuation Perspective

Currently, valuation multiples are stretched reflective of growth-stage risks. The negative P/E is symptomatic of losses, but EV/Sales at 10.5x portrays substantial market confidence in revenue potential and future cash flow generation. Compared to EdTech peers, the company’s hybrid delivery and AI integration confer competitive advantage. Investors should assess valuation through a growth-risk lens, anticipating margin improvement while monitoring cash flow metrics.

Conclusion and Investor Recommendation

PhysicsWallah offers a compelling growth story driven by affordability, technological innovation, and diversified channel strategy. The BUY recommendation is predicated on entry between Rs 103 and Rs 109 with upside targets up to Rs 145. While the path to sustained profitability necessitates discipline and execution rigor, the company’s strong footprint and innovation lead provide a lucrative opportunity in India’s expanding EdTech market. Investors should balance growth potential against operational and financial risks with prudent stop-loss discipline.

Key Financial Snapshot