PhysicsWallah’s Q2 Profit Surge, Elo Elo Bags $80 Mn & More

PhysicsWallah Back Among Profits

PhysicsWallah had a blockbuster Q2 FY27. The quarter saw the edtech giant swing back to profitability. With South India emerging as its next growth frontier and a NEET slowdown still lingering, can PW build on its Q2 momentum?

Here’s a quick glance at the edtech firm’s Q2 FY27 performance: 

• Net profit more than doubled YoY to ₹143.6 Cr 
• Operating revenue jumped 18.2% YoY to ₹1,242.3 Cr
• Total expenses also rose nearly 11% YoY ₹1,105.4 Cr
• EBITDA improved 52.6% YoY to ₹348 Cr

PW’s Growth Engines: The edtech major’s Q2 show was driven by healthy revenue growth, tighter cost control and improving operating leverage. Online business remained PW’s primary growth engine, while the offline network continued to add centres and enrolments. The company also benefited from a shift away from direct lending, reducing balance sheet risk. 

The startup’s next priority is its AI tutor (currently in pilot), which could reduce the cost of personalised learning and extend its reach beyond physical classrooms.

NEET Slowdown: The quarter was not without challenges. A delayed NEET exam cycle slowed enrolments and collections, impacting both online and offline verticals. To offset the gap, PW is launching full-length crash courses and increasing non-NEET enrolments. As a result, the management expects some collections to spill into the next quarter, while anticipating stronger recovery in the next academic session.

The Next Frontier: PW has now identified South India as its next major growth opportunity, which is home to a large student base. PW is pursuing the region through an online-first playbook rather than relying primarily on new physical centres. It also plans to tap into AI-led live translation to reach students across multiple Indic languages without adding significant academic cost. 

With profitability improving and AI becoming central to its strategy, here’s how PhysicsWallah fared on the financial front in Q2…

From The Editor’s Desk

Elo Elo Group Bags $80 Mn

• Microdrama platform Story TV’s parent has raised nearly ₹756 Cr in its Series C round led by NBCUniversal and Hornbill Capital to invest in premium original content across Indian languages, expand globally and strengthen its AI capabilities.
• Founded in 2020, EloElo Group’s portfolio spans four products. Story TV offers microdramas, while Master is a microlearning platform. It also sells AI-powered tools for creators and an AI companion agent called Voxy. It has raised $130 Mn to date.
• Microdramas are gaining global popularity as they are specifically built for mobile-first users and rely heavily on high-octane storytelling. The global microdrama industry is projected to generate $14 Bn in revenue by 2026-end.

Razorpay All Set For IPO

• The fintech major has received SEBI’s approval for its proposed IPO. The startup is now eyeing a listing between January and March 2027. This comes five months after Razorpay filed its IPO papers via the confidential route in June.
• The ₹5,000 Cr to ₹6,000 Cr public issue is expected to value the company at around ₹47,300 Cr. The IPO will likely comprise both a fresh issue and an offer-for-sale component. 
• Founded in 2014, Razorpay offers payment processing, business banking, payroll, and lending solutions. It has raised more than $800 Mn in funding to date from the likes of Y Combinator, Tiger Global Management, Ribbit Capital and Lightspeed.

NPCI Goes Beyond Payments

• Moving beyond its mainstay, the National Payments Corporation of India has set up a new subsidiary, called NPCI Tech Solutions Ltd, to build capabilities in AI, blockchain, and digital financial infrastructure.
• The payments body has appointed Vishal Kanvaty as the subsidiary’s MD and CEO. The new vertical will oversee GCC services, the Unified Ticketing Platform and other digital public infrastructure programmes.
• The NTSL formation comes as advances in AI and other emerging technologies open up new opportunities across digital infrastructure and financial services. The subsidiary will pursue these opportunities and strengthen NPCI’s technology capabilities.

Nykaa’s Profitable Q2 Show

• The beauty and fashion ecommerce major reported a 206.8% YoY jump in its net profit to ₹101.2 Cr in Q2 FY27. This came on the back of a stronger show by the beauty vertical and narrowing fashion losses.
• Meanwhile, operating revenue also rose 28.1% YoY to ₹3,006 Cr in the quarter under review. EBITDA surged 65% YoY to ₹263 Cr. However, expenses also continued to bite and rose 24.8% YoY to ₹2,867.1 Cr in Q2 FY27.
• On the operational front, Nykaa’s GMV grew 30% YoY to ₹6,151 Cr during the quarter. Meanwhile, its quick commerce offering, Nykaa Now, expanded to 15 cities in Q2 FY27. The company is targeting more than 25 cities by the end of FY27.

Mapping Agentic AI Liabilities

• The Data Security Council of India has proposed a new framework to determine liability when AI agents cause harm. It has recommended that the responsibility of harm should be assigned based on each participant’s decisions and degree of control.
• DSCI identifies 12 categories of potential harm, including privacy breaches, security threats, discrimination, safety risks, inaccurate outputs, IP violations, deepfakes, loss of control and AI-enabled cybercrime.
• DSCI argues that accountability should be traced via decisions such as model selection, system configuration and human oversight. It also pitches six safeguards, including monitoring model behaviour, restricting permissions and deploying scoped kill switches.

Inc42 Markets

Inc42 Startup Spotlight

How Karta Is Automating Customer Service For Banks

Most voice bots can answer questions. But banking calls often require action, be it checking loan status, retrieving documents or updating records. Karta AI is building voice agents that can resolve these complex financial calls end to end, thereby reducing queues and support costs.

Built For Banks: Founded in 2024, Karta operates an omnichannel customer communication platform spanning voice AI, chat, email and WhatsApp. Its AI agents use a predictive context engine that draws on knowledge bases, past interactions and live data to execute workflows across enterprise systems. 

This allows the startup to handle multiple customer intents in a single conversation rather than routing callers through multiple agents. 

Healthy Early Traction: The startup claims to handle around 20 Lakh user conversations every month across 25+ languages. Karta claims that its inbound servicing agent resolves about 70% of borrower queries and cuts cost per query by nearly 50%. The Bengaluru-based startup also claims to have 10-12 paying customers, including the likes of PhonePe, Pine Labs, Bajaj and Aavas. 

Eye On The Prize: Going forward, Karta plans to strengthen its end-to-end automation and multilingual capabilities, expand BFSI deployments, and grow its engineering and GTM teams. The startup’s challenge will be maintaining accuracy, security and compliance as it handles increasingly sensitive financial workflows. 

With India’s conversational AI market projected to become a $3.7 Bn opportunity by 2033, can Karta make voice agents the default layer for BFSI customer service?

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