For years, India’s coaching industry sold aspiration through scarcity. High fees, Kota-style intensity, star faculty and rank-driven marketing became the standard playbook for cracking competitive exams.
PhysicsWallah took a very different route.
Instead of starting with physical classrooms, it started with free YouTube videos. Instead of targeting affluent urban students, it focussed on affordability and reach. And instead of treating online learning as an extension of offline coaching, it built the entire business around digital distribution from the beginning.
That difference is now beginning to reshape how India’s education market works.
PhysicsWallah 1-Year Share Price Chart
That difference is now beginning to show up in the numbers. The company reported Q3FY26 revenue of Rs 1,082 crore, up 34% year-on-year, while nine-month revenue rose 31% to Rs 2,980 crore, already exceeding FY25 revenue of Rs 2,886 crore.
Pre-Ind AS EBITDA stood at Rs 219 crore with margins of 20.2%. Meanwhile, profit after tax came in at Rs 102 crore despite one-time expenses linked to labour code changes and initial public offering costs.
But the bigger story is not quarterly growth. The bigger story is that PhysicsWallah may be attempting to do to education what D-Mart did to retail: industrialise affordability.
From Free YouTube Videos to a Full Education Platform
PhysicsWallah was founded in 2016 as a YouTube channel by Alakh Pandey. The company itself was formally incorporated in 2020.
What looked like a simple online teaching platform gradually evolved into a broader education ecosystem spanning Joint Entrance Examination, National Eligibility cum Entrance Test, Union Public Service Commission preparation, commerce, law, Graduate Aptitude Test in Engineering, state boards, schools and now even kindergarten-to-class-12 education.
The business model remains unusual. The company teaches free content across nearly 250 YouTube channels and converts a portion of those students into paid learners on its application. Management calls this a “zero customer acquisition cost” model because the funnel is largely organic.
PhysicsWallah currently has 3.4 million daily active users spending an average of 106 minutes a day on the platform. Most education companies spend heavily on marketing and lead generation. PhysicsWallah built distribution first and monetisation later.
Why Inflation Could Actually Help PhysicsWallah
Brokerages are describing PhysicsWallah as a “recession-proof” internet company. This is because Indian households typically reduce discretionary consumption before cutting education expenses. A family may postpone buying a new phone or reduce eating out, but they are unlikely to stop spending on a child’s education, especially when competitive exams increasingly determine social mobility.
What changes instead is where that money goes. For instance, PhysicsWallah’s online Joint Entrance Examination courses range between roughly Rs 2,000 and Rs 7,000, while comparable live courses from large offline coaching players such as Allen and Aakash can cost well above Rs 1.5 lakh.
This is not merely discounting. Unlike traditional coaching chains, which depend on physical infrastructure and aggressive marketing, PhysicsWallah’s digital-first model allows it to operate at far lower customer acquisition costs.
The Offline Business Is Growing Too
Ironically, the company born online is now expanding aggressively offline as well. PhysicsWallah currently operates more than 300 offline learning centres.
Management says these centres primarily cater to students who perform better in structured classroom environments. Importantly, the company does not see offline as separate from online. It views offline centres as part of a larger integrated learning ecosystem.
The numbers suggest the strategy is working. Online revenue grew 38% year-on-year in Q3FY26 and now contributes around 51% of revenue. Offline revenue grew 26% and contributes 46%, with the remaining coming from other businesses and services.
That mix matters because online businesses generally enjoy stronger margins and lower capital intensity. Offline centres, meanwhile, strengthen trust and visibility in smaller cities where physical presence still influences enrolments.
The company plans to open around 70 new centres next year with a capital outlay of roughly Rs 200 crore.
A Strong Balance Sheet Gives It Firepower
PhysicsWallah was listed in late 2025 and raised around Rs 3,100 crore through a fresh issue as part of its initial public offering. The company now sits on nearly Rs 5,000 crore of cash and investments on its balance sheet, while generating close to Rs 600 crore in operating cash flow during the first nine months of FY26.
Debt remains modest with a debt-to-equity at 0.69. Promoter pledge is zero and the company now has enough capital to expand aggressively.
At the same time, the return ratios remain weak. Return on capital employed stands at -2.1% and profitability is still at an early stage despite the scale.
The market is currently valuing PhysicsWallah more on future potential than on present-day returns. After years of losses and heavy investment, PhysicsWallah may finally report its first full year of meaningful profitability in FY26.
Management plans to use its cash reserves toward offline expansion, acquisitions, artificial intelligence investments and building its kindergarten-to-class-12 platform. The company plans to open around 70 centres next year with a capital outlay of roughly Rs 200 crore, while around Rs 400 crore has already been allocated toward its school business.
PhysicsWallah’s Real Bet Is No Longer Coaching
PhysicsWallah believes India’s coaching industry exists largely because schools have failed to prepare students adequately for competitive exams. That belief is now shaping the company’s next phase of growth.
The company is no longer trying to build only a larger coaching platform. It is trying to integrate schooling and test preparation into a single ecosystem. Management indicated that the kindergarten-to-class-12 business could eventually become larger than the traditional test preparation segment over the next five years.
The company currently operates three schools and plans to add 8 more through greenfield and brownfield expansion. It has also allocated around Rs 400 crore toward building its school platform and partnered with Tender Heart School in Ranchi.
What PhysicsWallah is effectively attempting is to integrate school education and coaching under one roof. Parents already send children to school in the morning and coaching classes in the evening. The company believes that separation itself is inefficient.
Management also drew parallels with Chinese education companies. These include New Oriental Education, where kindergarten-to-class-12 education eventually became larger than its test-preparation business.
New Categories Are Scaling Rapidly
PhysicsWallah is also expanding beyond Joint Entrance Examination and National Eligibility cum Entrance Test preparation. New categories like Common Law Admission Test, National Eligibility cum Entrance Test Postgraduate and Indian Institute of Technology Joint Admission Test together contributed Rs 32 crore during the first nine months of FY26.
State boards, launched only in June 2025, scaled to 175,000 paid learners and Rs 22 crore revenue, while regional language offerings enrolled 94,000 paid students and generated Rs 24 crore revenue. This matters because the next phase of India’s internet growth is increasingly regional rather than English-speaking urban.
The Expansion Risks Are Real
The opportunity is large, but the risks are equally real. Moving into schools, state boards, law entrance preparation and regional education also increases operational complexity. A company that once focussed primarily on Joint Entrance Examination and National Eligibility cum Entrance Test preparation is now trying to build capabilities across multiple segments simultaneously.
School education operates very differently from test preparation. It requires curriculum design, teacher quality, compliance, physical infrastructure and long-term parent trust. Offline expansion also brings lower margins and higher capital requirements compared to the core online business.
The larger risk is cultural. PhysicsWallah became successful partly because of its simplicity and focus. As companies expand into too many adjacencies, they sometimes lose the sharpness that made them successful in the first place.
Margins Are Improving as Scale Kicks In
One of the more important developments in the latest quarter was margin improvement. Marketing spends fell by around Rs 20 crore in Q3FY26 as earlier customer acquisition investments began to normalise.
As a result, operating margins improved sharply to above 20% in Q3FY26, helped by rising online contribution and lower marketing intensity. That is an important shift because many edtech businesses historically struggled to convert growth into profitability.
PhysicsWallah now appears to be entering a phase where scale is starting to improve margins as well. Yet, the stock is not cheap. Despite correcting from earlier highs of around Rs 160, the stock is still expensive, trading at 5 times book value.
Final Thoughts
For years, India’s coaching industry monetised scarcity. Limited seats, premium pricing and Kota-style intensity became the defining features of the business.
PhysicsWallah is attempting something very different. It is trying to industrialise affordable education at scale. In a country where millions still struggle to access quality education, affordability itself can become a moat.
India’s education industry was built on the assumption that quality education had to remain expensive. PhysicsWallah’s bet is that affordability can scale quality instead of diluting it. If that works, the structure of India’s coaching industry may change permanently.
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.
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