JM Financial initiates 'Buy' on Physicswallah, sees 23% upside

Physicswallah share price: JM Financial has assigned a target price of ₹110, indicating an upside potential of 23 per cent from the previous close

Physicswallah share price: JM Financial Institutional Securities has initiated coverage on Physicswallah with a 'Buy' rating as the brokerage expects the company to report strong revenue growth, driven by its online business. The brokerage has assigned a target price of ₹110, indicating an upside potential of 23.2 per cent from the previous close of ₹89.30.     As of 11:25 AM, Physicswallah shares were trading 0.5 per cent higher at ₹89.75 with 3.3 million equities changing hands on the National Stock Exchange (NSE).     

Online business provides high-margin stability

Physicswallah has secured a dominant market position in the online segment with a paying user base of 4.37 million in nine months of the current financial year (9MFY26), according to JM Financial.  

 

 

The company can also maintain industry-leading efficiency with less marketing spend on the back of the organic reach. The edtech company recorded superior enrollment volumes and a robust cash flow, which outpaced its peers significantly in the financial year 2025, the brokerage said. Hence, the online business provides a high-margin stability, which is required to fund broader ambitions. 

 

“A formidable digital footprint serves as a high-conversion funnel for the company’s aggressive offline expansion, allowing it to enter competitive markets with built-in brand equity,” JM Financial said. 

 

Physicswallah’s agile model enables frictionless expansion into new exam categories and different geographies, accelerating the rollout of new offerings. The scalable playbook in civil services and commerce has garnered strong traction, the brokerage said. 

 JM Financial estimates a 28 per cent revenue compound annual growth rate (CAGR) over the financial years 2025 and 2028. The brokerage expects the company’s consolidated adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) to rise to 13 per cent by financial year 2028 from 3.2 per cent in the financial year 2025, as the brokerage has noticed a strong operating leverage in both online and offline channels.  

 

However, JM Financial has valued the digital side of the business at 30 times the FY28 PE estimate, a higher valuation than the 25 times given for the offline business. This aligned with the brokerage’s view that the online segment is the main engine for Physicswallah’s growth.  

 

Challenges in offline expansion

Although Physicswallah has all the ingredients to succeed offline with a dominant brand equity to drive footfall, ensure day-one offlien occupancy, and a robust balance sheet to absorb the high capital expenditure.

 

However, the history suggests that expanding offline is notoriously difficult, as securing prime real estate in competitive education hubs and recruiting top-tier faculty who can truly represent the brand are constant hurdles. These operational challenges — ranging from site management to localised service — create significant friction that tests even the most established players. 

 

Key risks

According to JM Financial, key risks to Physicswallah’s growth would be market saturation in flagship categories like NEET, JEE, and Foundation. Operational challenges inthe offline space may also pose a risk to the downside.

 

Apart from these, geographic concentration risk and regulatory challenges can also negatively impact Physicswallah’s growth trajectory, the brokerage added. 

 

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