PhysicsWallah Shares Jump 9% After Q1 Loss Narrows; Brokerage Sees 20% Upside

Shares of edtech company PhysicsWallah gained as much as 9% in morning trade on Monday after the company reported a narrowing of its net loss for the first quarter of FY27, supported by growth across its online and offline learning businesses.

The stock opened lower at ₹114.65 on the NSE but quickly recovered and climbed to an intraday high of ₹128.37. At around 10:53 am, PhysicsWallah shares were trading at ₹126.49, retaining most of the early gains. More than 27 million shares changed hands during the first 30 minutes of trade.

PhysicsWallah reported a consolidated net loss of ₹88.28 crore in Q1FY27, compared with a loss of ₹127 crore in the year-ago quarter. The company had reported a loss of ₹120.45 crore in the corresponding period of the previous fiscal year.

Online Business Leads Revenue Growth

Consolidated revenue from operations rose 24.4% year-on-year to ₹1,053.95 crore in Q1FY27 from ₹847.09 crore a year earlier.

Sequentially, revenue increased 14.7% from ₹918.80 crore, although the company's loss widened from ₹74.89 crore in the previous quarter.

The online coaching and book sales division contributed ₹548.79 crore to revenue, while the offline segment, comprising classroom-based coaching and hostel services, generated ₹489.90 crore.

EBITDA loss narrowed sharply to ₹44.2 crore in Q1FY27 from ₹88.7 crore in Q1FY26. EBITDA margin improved by around 628 basis points year-on-year to -4.2%.

JM Financial attributed the improvement to broad-based cost leverage, noting that employee benefits expense excluding ESOP costs declined by around 260 basis points as a percentage of revenue to approximately 46.4%, despite rising around 18% in absolute terms.

JM Financial Upgrades Stock To 'Buy'

Following the results, JM Financial upgraded PhysicsWallah to 'Buy' from 'Add', saying the company delivered a decent quarter despite disruption related to NEET.

The brokerage said underlying business fundamentals remain intact and the stock's correction of more than 20% from recent highs has made its risk-reward profile more favourable.

JM Financial assigned a ₹140 target price, implying nearly 20% upside from the previous closing price of ₹117.12.

The brokerage identified the online business as the company's key growth engine, citing strong traction in K-12/Early Learning, vernacular offerings and newer categories, alongside improving monetisation and profitability.

Offline business growth of 14.5% year-on-year was described as optically subdued due to the shift in NEET timing.

PAT Profitability In Q3

Management reiterated its FY27 consolidated revenue growth guidance of around 30%. The company also announced the divestment of FinZ, which JM Financial said could help address capital allocation concerns.

The brokerage raised its consolidated Pre-Ind AS EBITDA estimates by 7-9% for FY27E-29E, largely due to lower expected losses in the Others segment following the closure of FinZ and the realignment of certain experiments into the online and offline segments.

As a result, JM Financial raised its adjusted PAT estimates by 4-12%.

Separately, PhysicsWallah co-founder Prateek Maheshwari said the company expects to achieve group-level PAT profitability in Q3 FY27.