PhysicsWallah Stock Rallies 5% After Block Deal, Motilal Oswal Sets ₹200 Target

Shares of PhysicsWallah rose 5.10% to ₹126.75 at 1:17 PM on Friday after around 4.14 million shares changed hands in a block deal. The move also came after brokerage firm Motilal Oswal Financial Services initiated coverage on the edtech company with a ‘Buy’ rating and a target price of ₹200.

The brokerage’s target implies a potential upside of about 66% from its reference price of ₹121.

Motilal Oswal said PhysicsWallah is among India’s largest education platforms and has built what it considers one of the most capital-efficient business models in Indian edtech. The brokerage sees substantial room for online education to expand as digital penetration remains low across several segments.

Online Education Seen As Key Growth Driver

Motilal Oswal expects PhysicsWallah’s online revenue to grow at around 28% annually between FY26 and FY30E, supported by growth in paid users, expansion into new categories and AI-led monetisation.

The brokerage said India’s education market, estimated at ₹15 trillion-₹16 trillion, remains significantly underpenetrated online. While online penetration in flagship categories such as JEE and NEET is around 20%, penetration in foundation courses, state boards and government examinations remains below 1%.

PhysicsWallah has also built a large digital audience, with more than 100 million YouTube subscribers. Motilal Oswal said the company’s revenue has compounded at around 74% between FY23 and FY26.

The brokerage expects pre-Ind AS EBITDA margins for the online business to improve from around 26% in FY26 to about 30% by FY28E, helped by operating leverage and better customer acquisition efficiencies.

Offline Network Adds Higher-ARPU Layer

While the online business remains the primary value driver, Motilal Oswal views PhysicsWallah’s offline operations as a higher-ARPU monetisation layer. The company’s offline centre network has expanded rapidly in recent years.

PhysicsWallah had 353 offline centres by FY26, up from 28 in FY23. Around 80% of offline admissions originate from its online learner base, according to the brokerage, making the physical network an extension of its digital funnel.

Motilal Oswal expects offline revenue to grow at around 20% CAGR between FY26 and FY30E as recently opened centres mature and utilisation improves. It values the offline business at 15 times FY28E EV/EBITDA, reflecting its lower margins and higher execution intensity.

Using a sum-of-the-parts valuation, the brokerage assigns a 50-times FY28E EV/EBITDA multiple to the online business and 15 times to the offline business. After factoring in other businesses and cash reserves, it arrived at a ₹200 target price and initiated coverage with a ‘Buy’ rating.