PhysicsWallah posts Rs 1,242 Cr top-line in Q2; net profit doubles

The second quarter of the 2027 financial year marked a pivotal turn for PhysicsWallah (PW), as expanding scale and cost efficiencies together yielded a record-breaking quarterly top-line and a doubled net profit.

“We delivered record revenue and a sharp improvement in profitability, while our learner base kept widening across K-12, vernacular and new categories. Our focus remains on scaling affordable, tech-led education with disciplined capital allocation,” said Founder and Chief Executive Officer Alakh Pandey.

During the second quarter of FY27 (July to September 2026), PW achieved its highest-ever quarterly revenue, driven by expanding student enrolments and enhanced course realisations. 

Consolidated revenue from operations reached Rs 1,242.26 crore, up 18.2% YoY. Total income, which includes other non-operating receipts, grew 21.5% YoY to Rs 1,334.64 crore.

The business operates across two principal delivery channels alongside auxiliary services. The online channel remained the primary engine of top-line growth, generating Rs 693.52 crore in operational revenue during the quarter. This marked a 26.4% YoY surge from Rs 548.72 crore in the year-ago period, representing 55.8% of total revenue from operations. The offline channel contributed Rs 540.87 crore, a 9% YoY rise from Rs 496.10 crore, accounting for 43.5% of operational revenue. 

Other operational streams, encompassing YouTube advertising, hardware device sales, and institutional support services, generated Rs 7.87 crore, growing 22.4% YoY.

Profitability demonstrated substantial expansion as fixed platform, content, and teaching infrastructure costs were distributed across a wider user base. Consolidated profit after tax doubled to Rs 142.29 crore in the second quarter, rising 104.1% YoY from Rs 69.72 crore. 

The net profit in Q2FY27 comes after a loss of Rs 87.04 crore in Q1FY27.

Profit after tax margin, defined as net earnings divided by operational revenue, widened by 482 basis points to 11.5% from 6.6%. Profit before tax surged 111.6% YoY to Rs 209.15 crore. This figure included a one-off Rs 20 crore exceptional goodwill impairment charge and a Rs 10 crore fair-value gain on financial instruments.

Reported EBITDA under Indian Accounting Standards (IndAS) reached Rs 348 crore, yielding a 28.0% margin compared to Rs 228 crore and a 21.7% margin in the same period last year. Adjusted EBITDA, which adds back fair-value adjustments and lease liabilities, rose to Rs 399 crore at a 32.1% margin against Rs 270 crore and 25.7% previously. Pre-IndAS cash EBITDA grew 45.0% YoY to Rs 233 crore, lifting margins to 18.8% from 15.3%.

Total consolidated expenses for continuing operations stood at Rs 1,105.43 crore. Employee benefits expense formed the largest single cost centre at Rs 522.38 crore, including Rs 482 crore in core salaries and Rs 40 crore in non-cash share-based compensation. Other operational expenses totaled Rs 237.58 crore, with marketing, advertisement, and publicity accounting for Rs 87.92 crore. 

Strategic growth and technology

The online division benefitted from increased student engagement and higher collection realisations. Unique transacting online users grew 12.9% YoY to 1.5 million during the quarter, while average collection per user rose 10.6% YoY to Rs 4,280. 

Growth was bolstered by strong demand for premium course bundles, with collections from Infinity and Infinity Pro collections expanding 49% in the second quarter. 

Higher-value non-medical categories led the expansion, including civil services with a 34.2% increase in average collections, GATE rising 30.7%, foundation courses up 22.6%, and MBA programmes up 21.4%.

The quarter also experienced an operational shift in medical entrance prep demand. Postponement of the NEET UG 2026 exam results to July 16 delayed student enrollments, shifting a major portion of admission activity into the second quarter. Consequently, online NEET enrollments surged over 30% YoY during the three-month period.

In the offline segment, revenue reached Rs 541 crore across 370 physical centres, compared to 314 centres a year earlier. The offline channel recorded a Pre-IndAS EBITDA loss of Rs 8 crore in the second quarter, narrowing from earlier periods as mature centres improved utilisation. 

The company management has intentionally slowed physical expansion to 25-30 new centres annually to focus on centre-level profitability and smaller footprint models.

To streamline capital deployment, PW exited direct student lending by selling the Rs 96 crore loan book of its subsidiary FinZ Finance Private Limited to Auxilo Finserve Private Limited on October 3.

Artificial intelligence integration has expanded operational efficiency across learning platforms. Automated systems resolve 80% of student support queries without human intervention and generate 92% of internal software code, the company said.

The company is developing AI Tuto, a conversational voice-based 1:1 tutor designed to guide students at an estimated cost to serve of Rs 17 per hour.