PhysicsWallah shares gain as Q2 profit doubles, Motilal sees 51% upside potential

PhysicsWallah's shares rose on Thursday after the edtech firm announced a more than double increase in consolidated net profit to ₹143.63 crore in Q2 ended September 30, 2026. The company reported growth in both its online and offline businesses, with online revenue up 26.4% year-on-year to ₹694 crore and offline revenue up 9% to ₹541 crore.

The stock closed 3.76% higher at ₹132.20 following a jump to ₹140.25 from ₹127.41 the previous close on the NSE. The company's growth in NEET enrollments surged over 30% during the quarter as delays to the NEET UG exam led to heightened demand. PhysicsWallah CEO Alakh Pandey highlighted the company's achievement of record revenue and a significant improvement in profitability while expanding its learner base across various categories.

The firm has slowed the opening of new centers and is focusing on enhancing the performance of existing centers and bolstering their economic models. Motilal Oswal maintained a 'buy' rating on PhysicsWallah with a price target of ₹200, suggesting a 51% upside from the current level. The brokerage expects the company to generate ₹21.6 billion in pre-Ind AS EBITDA by FY30, driven by a 25-30% revenue CAGR and expanding margins.

Mature categories within the business are already achieving EBITDA margins of around 50%, while the asset-light structure provides significant operating leverage as the company scales. Motilal Oswal has kept most of its projections intact, with the exception of profit after tax (PAT), which has been revised to account for higher tax expenses.

The broker values the online segment at 50 times FY28E EV/EBITDA and the offline segment at 15 times FY28E EV/EBITDA under a sum-of-the-parts valuation. PL Capital also retained a 'accumulate' rating on PhysicsWallah with a target price of ₹140, based on a sum-of-the-parts valuation. The brokerage reduced its pre-Ind AS EBITDA estimates by 2% for FY28E and 3% for FY29E, adjusting its growth assumptions for the offline business due to the weight of operating leverage from the online side.

PhysicsWallah's revised full-year revenue growth guidance of around 30% remains unchanged. The company anticipates revenue and pre-Ind AS EBITDA to experience CAGRs of 25% and 66% over FY26-29E, respectively, fueled by the expansion into online K-12, early learning, and upskilling categories.