- Motilal Oswal initiates Buy rating on Physicswallah with Rs 200 target price and 66% upside
- Physicswallah’s low student acquisition cost and omni-channel model support sustained growth
- Online business drives value, expected to grow 28% CAGR from FY26 to FY30 with margin improvement
Physicswallah Share Price Target: Physicswallah shares could have substantial room to run, according to Motilal Oswal, which has initiated coverage on the edtech company with a 'Buy' rating and a target price of Rs 200. Against a current market price of Rs 121, the brokerage sees 66% upside in the stock.
The brokerage's bullish view rests on what it sees as PW's differentiated, capital-efficient model, particularly its online business. Motilal Oswal believes the company's large free-to-paid funnel, low customer acquisition costs and expanding monetisation opportunities give it a strong foundation for sustained growth.
Physics Wallah Share Price: Why Motilal Oswal Is Bullish
Motilal Oswal said Physicswallah has evolved from a single-founder YouTube channel into a scaled, omni-channel education platform with a meaningful presence across some of India's most competitive examination categories.
ALSO READ: Lightspeed's Rush Exit From PhysicsWallah After Byju's Bet Raises Edtech Revival Questions
A key competitive advantage, according to the brokerage, is PW's cost of student acquisition. Alakh Pandey's YouTube channel was built before the company's paid products and now feeds a funnel ranging from free content to Pi OTT, flagship batches and Vidyapeeth's offline centres. This allows PW to monetise students across seven price points on a single platform.
The platform has also crossed 83 million app downloads, while its marketing spend remains structurally lower than performance-marketing-heavy peers, according to Motilal Oswal. The brokerage believes this creates a self-reinforcing customer acquisition cost advantage as the business scales.
Online Business Seen As Key Value Driver
Motilal Oswal considers the online business to be PW's primary value driver and estimates online revenue to grow at around 28% CAGR between FY26 and FY30E.
The growth is expected to be supported by paid-user additions, expansion into deeper categories and AI-led monetisation. The brokerage also expects Pre-IND AS EBITDA margins to improve from around 26% in FY26 to 30% by FY28E, aided by operating leverage and greater customer acquisition efficiency.
India's education market, estimated at Rs 15-16 trillion, remains considerably underpenetrated online, the brokerage noted. Online penetration in flagship categories such as JEE and NEET is around 20%, while newer segments including foundation, state boards and government examinations have penetration of less than 1%.
PW Offline Expansion Could Give Way To Profitability
While online remains the principal value driver, the offline business provides PW with a higher-ARPU monetisation layer.
Physicswallah expanded its offline centre count from 28 in FY23 to 353 by FY26-end, representing a 233% CAGR. Offline revenue grew at around 85% CAGR over the same period to Rs 1,770 crore, accounting for around 45% of total revenue.
Motilal Oswal believes the aggressive expansion phase is now nearing its end, with a slower centre expansion trajectory likely to improve unit economics. It expects offline revenue to grow at around 20% CAGR over FY26-30E, with profitability improving as newer centres mature and utilisation increases.
The brokerage estimates that around 80% of offline admissions originate from PW's online base, making the offline network a physical extension of its digital platform.
How Motilal Oswal Arrives At Rs 200 Target
Motilal Oswal has valued Physicswallah using a sum-of-the-parts (SoTP) approach.
For the online business, it assigns 50x FY28E EV/EBITDA, reflecting PW's market leadership, structurally superior unit economics and scalable technology platform. This translates into a value of Rs 172 per share.
The offline business is valued at 15x FY28E EV/EBITDA, contributing Rs 4 per share, while other businesses are valued at 1x FY28E EV/sales, contributing Rs 1 per share.
After adjusting for cash, the brokerage arrives at a target price of Rs 200, implying 66% upside from the current market price of Rs 121. Motilal Oswal has therefore initiated coverage with a 'Buy' rating.
Physics Wallah Share Price: Key Risks
The brokerage highlighted higher competitive intensity, weaker offline execution and centre utilisation as key risks. Higher faculty attrition could also affect student outcomes and brand perception, while adverse regulatory changes involving coaching institutes, advertising or data privacy could weigh on the business.
ALSO READ: PhysicsWallah Q1 Results: Net Loss Narrows 36%, Revenue Tops Rs 1,000 Crore
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.