PhysicsWallah’s Q1 FY27 revenue growth was driven largely by higher revenue per student rather than enrolment growth. Revenue from operations rose 24% to Rs 1,054 crore, while net loss narrowed to Rs 88 crore from Rs 127 crore. Paid users grew 2.4% to 2.49 million, with NEET’s cancelled and re-conducted examination affecting enrolment cycles. Co-founder Prateek Maheshwari, in an interview with Anees Hussain, discusses the slower pace of offline expansion, the pause in K-12 offline plans and the company’s AI roadmap. Excerpts:
Q You are stretching the two-year offline expansion plan to four years. What changed?
Seventy of the 200 centres we had guided have opened. We had planned to add the remaining 130-140 over the next two years, but will now take four more years. We will slow new centre additions and focus on improving existing centres, processes and outcomes. We will continue entering new geographies, while Vidyapeeth revenue growth will remain above 20% in the coming years.
Q Why slow expansion now?
The priority is profitability. We wanted to make the entire offline business near profitable this year. Offline margin improved 475 basis points to -22% in the quarter. We took a conscious call to improve the student experience before expanding aggressively. At a blended level, we are growing 30%, so growth is not the concern. Our focus is on vernacular, state boards, Curious Junior and K-12. We will revisit faster offline expansion after a couple of years.
Q What happened to the offline K-12 plan?
We had planned to allocate capital to it before the IPO, but have put it on hold. There will be no further capital allocation to K-12 offline this financial year. We will first build K-12 online, as we did with test preparation, and then consider offline. K-12 revenue has crossed Rs 100 crore and grown 88%. By K-12 offline, we mean setting up independent schools, which requires significant capex. For now, we want to be more frugal with capital.
Q Are you moving towards a hybrid offering?
Yes. We want to combine offline and online into a more scalable hybrid model. We will pilot it in a couple of cities and centres, mainly for JEE and NEET. There will be no revenue impact this year. Online offers strong teachers and NPS, but students can lack discipline and practice. Offline provides attendance, peer engagement and better course completion. We want to combine the strengths of both.
Q With most growth coming from Arpu rather than enrolments, does affordability remain intact?
There is no pressure to raise base prices. Online ACPU increased 10% to Rs 4,311 and offline Arpu 7% to Rs 12,633, while base batch prices are broadly unchanged. The increase comes from Infinity and Infinity Pro, which offer additional features such as 100,000 videos, personalised tests, AI-led doubt solving, mentorship and digital books. A Rs 5,000 base batch costs Rs 7,500 with Infinity and Rs 12,000 with Infinity Pro. This allows Arpu growth without compromising affordability.
Q Is 2.4% enrolment growth the new run rate?
No, it was a one-off. NEET and government examination notifications affected enrolment timing. Offline revenue growth would have been 22-25% instead of 14% had the NEET cycle been on schedule. Since July, offline NEET enrolments have grown 82%, while online collections between July 1 and August 13 rose 51%. We expect stronger Q2 and Q3 trends. Our annual revenue growth guidance remains 30%.
Q When will the AI tutor become a product?
We will roll it out this year. It works in Hindi, Hinglish and English voice and is backed by more than one million questions. The pilot showed 95% lesson-level accuracy, below 1% hallucination and 1.8-2.2 second latency across more than 300 students. The pilot cost was $0.2 per hour, and we expect this to decline as frontier-model token costs improve.