ABOUT THE COMPANY
PHYSICS WALLAH is an Indian ed tech startup offering test-prep for JEE, NEET, CA, Civil Services, etc. The company started with a YouTube channel by Sir Alakh Pandey in 2016 and 10 years forward it has listed on the Indian stock market with a market capitalization of Rs 38,676 Crores. The Company has 303 offline centres and 166 residential hostels under the Xylem brand as of June 30, 2025. The company launched its public offering in November 2025 and opened strongly with more than 30-40% jump raising 3,100 Crores.
The fresh issue of 3,100 Crores will be utilised for:
A) Capital expenditure for fit-outs of new offline and hybrid centers.
B) Expenditure towards lease payments of existing identified offline and hybrid centers
C) Capital expenditure for fit-outs of new offline centers of Xylem
D) Lease payments for Xylem’s existing identified offline centers and hostels
E) Investment in Subsidiary, Utkarsh Classes & Edu tech Private Limited
F) Expenditure towards server and cloud-related infrastructure costs
G) Expenditure towards marketing initiatives
H) Acquisition of additional shareholding in our Subsidiary
I) Funding inorganic growth through unidentified acquisitions and general corporate purposes
Quick peer context:
| Company Name | Market Capitalization | Return On Capital Employed | Return On Equity |
| Physics wallah | ₹ 38675.58 Crores | -2.12 % | |
| MPS | ₹ 3544.18 Crores | 40.94 % | 30.46 % |
| Veranda Learning | ₹ 2014.79 Crores | -12.96 % | -78.00 % |
Physics Wallah has the highest valuation among its competitors showing investor’s confidence in the company, which is good for the company, but high valuation means expectations are high with the company future growth — any slowdown or margin compression could put valuation at risk.
Return On Capital Employed is negative as of now meaning company is burning cash to acquire sales while its competitor MPS Limited has ROCE of 40.94% meaning PW must improve its ROCE to become profitable and compete in the long run.
Analysis of the Financial Statements
Revenue Growth Trend
The sales of the company have multiplied nearly 10 folds, making its CAGR for sales 87.62 % but the growth in expenses is much faster than the increase in sales, this can be due to the aggressive expansion plans and customer acquisition costs. As of March 2025, the major portion of the expenses is covered by the Employee cost which is the variable cost for a business meaning as the business grows this cost will also be increasing. So, if PW must convert its sales into profits it has to master the art of cost efficiency and sales expansion.
| March 2022 | March 2023 | March 2024 | March 2025 |
| 233 CRORES | 744 CRORES | 2,098 CRORES | 2,688 CRORES |
Profitability & Margin Analysis
Operating Profit Margin of the company has been negative in the past 2 years out of 3 years. The operating profit margin of PW in FY24-25 was 7% while its competitor MPS Limited operates at OPM of 29% and Veranda Learning at an OPM of 15%. Management needs to focus on its operating cost to strengthen its reserves bank to grab better future opportunities and give tough competition to its competitors.
| March 2022 | March 2023 | March 2024 | March 2025 |
| 57% | -3% | -8% | 7% |
Balance Sheet Strength
Total Assets of the company have grown, and a major portion of the total assets are made by the fixed assets of the company, particularly buildings. This shows that company has resources for customer acquisition in the future. Company has less trade receivable due to its 5-day debtors payback period and the same is reflected by the positive cash flow of the company.
| March 2022 | March 2023 | March 2024 | March 2025 |
| 173 CRORES | 2,080 CRORES | 2,485 CRORES | 4,168 CRORES |
Debt Profile
Company’s borrowing stands at Rs 1,831 crores out of which Rs 996 cores are leased liability which is good sign for the rapid expansion of the company.
More fixed assets (mainly buildings) = more offline centres → more lease commitments (long-term leases) → high lease liabilities on balance sheet
But this can backfire if the company is unable to maintain positive cash flows across the lease liability period as high lease liability means higher cash outflow if store sales slow, covering fixed lease costs could become challenging.
Reserves and surplus of the company have been negative for FY23-23 and FY24-25 and have been positive this year. However, given the business is still in investment intensive phase the durability of these reserves build-up will depend on sustained profitability, margin expansion and avoidance of large one-off losses.
| March 2022 | March 2023 | March 2024 | March 2025 |
| 100 CRORES | -189 CRORES | -1252 CRORES | 472 CRORES |
Cash Flow Health
The Cash from Operating Activity has doubled from last year making the operative cash flow positive. Company is heavily investing its funds for growth and to capture large market share. The cash conversion cycle of the company is 5 days, which is far better than its competitors, it helps company to maintain cash for working capital requirement.
Comparative Data with Key Competitors (MPS Limited, Veranda Learning Limited)
| Parameter | Physics Wallah | MPS Limited | Veranda Learning Limited |
| Sales Growth (5-Yr CAGR) | 87.62 % | 7-9% | 30% |
| Operating Profit Margin | 3.14% (FY25) | 31.1% (Latest Q2 FY26) | 36.44% (Latest Q2) |
| Debt-to-Equity | Very Low | Very Low Close to 0 | Moderate |
Disclaimer: The article is for informational purposes only and not investment advice.