Shares of Indian edtech company PhysicsWallah jumped as much as 9.5% intraday after Q1 FY27 results exceeded expectations, prompting JPMorgan and JM Financial to upgrade their ratings on the stock.
- Q1 revenue grew 24.4% YoY to ₹1,054 Cr, with online revenues up 33%
- JPMorgan upgraded to Overweight; JM Financial raised rating to Buy
- Co-founder targets profitability by Q3 FY27 as business fundamentals strengthen
What happened
PhysicsWallah’s Q1 FY27 operating revenue rose by 24.4% year-on-year to ₹1,054 crore, surpassing estimates despite disruption caused by the NEET exam cycle. Online revenue, a key growth driver, increased by 33% with user engagement also improving. The company narrowed its net loss by 30.5% compared to the previous year, supported by a positive EBITDA of ₹52 crore for the quarter compared to a loss last year.
Following these results, JPMorgan upgraded the stock to 'Overweight' with a target price of ₹148, implying a 26% upside, while JM Financial raised its rating to 'Buy', maintaining a target price of ₹140. Both brokerages cited the company’s resilience amid exam disruptions and a stronger focus on its education business after divesting its NBFC arm.
Why it matters
PhysicsWallah’s performance signals robust growth and operational improvements in India’s competitive edtech market. The company’s ability to grow revenues and improve margins despite seasonal exam-related disruptions highlights stability, which has reassured investors and analysts. The strategic divestment of FinZ Finance plays into a sharper focus on core educational offerings, streamlining business operations.
Analysts view the recent correction in stock price as an opportunity, with upgraded ratings underscoring positive risk-reward dynamics. The co-founder’s guidance to achieve profitability by Q3 FY27 builds confidence in the company’s path toward sustainable earnings and enhanced shareholder value.
What to watch next
Key metrics to monitor include PhysicsWallah’s revenue trajectory in upcoming quarters, especially post-NEET exam cycles, and the impact of its concentration on education after the NBFC exit. The company’s progress toward its targeted profitability in Q3 FY27 will be critical for validating analyst optimism and market sentiment.
Additionally, the performance of its expanded stake in UPSC coaching institute Sarrthi IAS, following a recent acquisition, will be important. Investors will also watch how the firm manages user growth and monetization amid tightening competition and evolving educational needs in India.