Edtech major PhysicsWallah is pulling back on its ambitious expansion into K-12 schooling announced in the previous quarter (Q3 of FY26), and reverting to a sharp focus on profitability in its core online and offline education businesses, a top executive of the company said.
“K-12 is the mother of all markets. But if you see the journey of PhysicsWallah, we essentially were an online company and then we went offline. A similar strategy is being taken in our K-12 approach as well,” Prateek Boob, co-founder of PhysicsWallah, told Mint in an interview after the company’s earnings call on Wednesday.
“We did some ₹100 crore of investment there earlier. And now we have decided not to further allocate capital to that,” he added.
PhysicsWallah, which was founded as a YouTube channel in 2016 by Alakh Pandey and Prateek Maheshwari and incorporated as a company in 2020, launched offline education in 2022 after online education slowed down along with others in the segment. The company now offers education to students through its native app, tech-enabled offline and hybrid centres, as well asYouTube channels.
“For offline, our focus is more towards profitability, while in online we continue to focus on revenue growth and profitability. For next year, we have not formally guided any number on the offline test prep centre expansion,” Boob told Mint. Earlier, the company had planned to open around 70 offline centres every year.
Of its 116 offline centres, 72 are currently profitable, the company said. It expects all centres to turn profitable in FY27, with offline margins improving from -19% to -10% this quarter.
The moderation in ambitions comes even as PhysicsWallah reported strong FY26 growth despite a challenging environment for the broader edtech sector.
Revenue from operations rose 35% year-on-year (y-o-y) to ₹3,900 crore. The company reported profit before tax of ₹10 crore compared to a loss of ₹259 crore in FY25, while Ebitda rose 184% y-o-y to ₹549 crore.
In the fourth quarter, revenue rose 50% y-o-y to ₹919 crore and losses narrowed to ₹69 crore from ₹289 crore in the year-ago period.
The company said online education contributes about 51% of total revenue and is expected to grow further, while offline contributes 46%.
The company expects online to grow further in the current financial year, with the management emphasising that online remains the company’s strongest growth lever, supported by improving student enrolments, particularly from state boards and foundation-level programmes.
PhysicsWallah’s stock is currently at least 30% below its ₹155 listing price on 18 November 2025. On Wednesday, the stock rose 0.06% to ₹112.10 on the NSE, even as the benchmark Nifty 50 fell 0.03%. The company’s results were announced after market hours.
“We care for our investors and public market investors. But the growth comes from the dedication we put toward students in classrooms. With these kinds of performances in upcoming years, markets will definitely reward us with the right market cap,” Boob told Mint, when asked on plans to improve stock performance.
Reduced focus on schools
PhysicsWallah had earmarked ₹400 crore for building its K-12 platform through Pen Pencil, its school management arm that houses school partnerships and owned-school initiatives. The company entered K-12 through smaller online offerings and its early-learning brand interactive online learning platform Curious Junior in 2023 and other state-board-focused offerings.
The school strategy spanned multiple models including partnerships with existing schools under a network integration programme, greenfield and brownfield school projects, and full management control in select cases such as its Tender Hearts School partnership.
In February, Mint reported that the company, which built its business around helping students crack competitive exams such as JEE and NEET, believed improving coaching outcomes required fixing school education itself.
However, Boob said while some of these existing initiatives will continue, the company will not invest further in this vertical.
Focus on organic growth
Despite sitting on a treasury of nearly ₹5,000 crore after listing, PhysicsWallah is remaining conservative on capital deployment.
“Not a significant capital allocation toward inorganic expansion right now,” Boob said, adding that the company intends to maintain a “strong treasury position”.
While PhysicsWallah is evaluating a few strategic deals that could be announced next quarter, he said “there will not be significant capital allocation toward those as well”.
Several large education firms are rethinking capital-intensive expansion strategies after years of aggressive spending. Rival Allen Career Institute has been expanding into schools, while other private equity-backed K-12 chains continue to attract investor interest and evaluate inorganic school expansion.
Interestingly, PhysicsWallah is also experimenting with education financing. The company disclosed that loan disbursements under its financing initiatives crossed ₹200 crore, with management saying non-performing assets remain below 1%.
“These are typically short-duration loans of less than one year,” management said, adding that the business is still relatively small and not financially meaningful yet. The company clarified that it is not meaningfully deploying its own balance sheet capital into lending and largely works through NBFC partnerships.
Artificial intelligence is also emerging as another major focus area for the company. “AI has definitely had a great impact on engagement, which translates into revenue for our online batches,” Boob said, adding that improved AI-led engagement and conversion contributed to PhysicsWallah’s strong Q4 performance.
“The turnaround time of solving a doubt used to be seven hours. Now it has reduced to less than 10 minutes,” Boob said. The company is planning to launch an AI Tutor that will generate AI-led revenue.
