PhysicsWallah shares rally 8% after Q1 loss narrows, revenue rises 24% YoY. Should you buy?

PhysicsWallah shares surged 7.73% to Rs 127 in Monday’s trading, following the edtech firm's strong Q1FY27 results. Despite a disruption from the NEET exam schedule, analysts upgraded the stock to a BUY rating, appreciating the company's financial improvement. The consolidated net loss narrowed to Rs 88.3 crore, down from Rs 127 crore a year earlier, while revenue from operations increased 24% YoY to Rs 1,054 crore.

The strong growth in the online business, driven by K-12, Early Learning, and vernacular content, played a key role. PhysicsWallah also reported a remarkable rise in adjusted EBITDA to Rs 135 crore, up more than five-fold from the previous year, and a margin expansion to 12.9%. The online business remains the main growth driver, with learner engagement surging by 26% YoY and a user base of over 4.03 million daily active users.

Total enrolments stood at 2.49 million, a 2.4% rise year-on-year. The company operates 366 offline centres and employs 7,268 faculty members across 16 online exam categories. With a focus on disciplined capital allocation, PhysicsWallah aims for sustainable profitability. Brokerage JM Financial Institutional Securities described the Q1 performance as "decent," highlighting a 33.2% YoY growth in online business and improving EBITDA. They upgraded the stock to Buy, targeting Rs 140, and noted the positive impact of divesting FinZ.