Axis Capital initiates coverage on PhysicsWallah with Add rating, targets Rs 138

Axis Capital has initiated coverage on PhysicsWallah (PW) with an Add rating and a price target of Rs 138. An Add rating typically indicates an expectation that the stock will deliver returns in line with or better than the broader market over the medium to long term.

In its initiation note, the brokerage said the rising demand for entry into top educational institutes and government jobs, coupled with limited seats, continues to support long-term growth for test-prep players like PhysicsWallah. The firm said this demand trend validates PW’s focus on affordability-led education at scale.

Axis Capital also highlighted PhysicsWallah’s large organic student base, built primarily through its online ecosystem and YouTube presence, as a key strength. This organic funnel helps the company keep customer acquisition costs low and offer courses at lower prices than most competitors, creating a strong moat in an increasingly competitive edtech market, the report added.

While the online business remains PhysicsWallah’s core strength, Axis Capital also flagged challenges in scaling the offline segment profitably. The offline business, which began expanding meaningfully from FY23, faces stiff competition from both organised coaching chains and local players. Pricing power is also limited, with outcomes playing a bigger role than affordability in offline education.

Recently, PhysicsWallah approved the acquisition of an additional 12.29% stake in its subsidiary Xylem Learning, taking its total shareholding to 77.27%. On the financial front, the company’s operating revenue grew nearly 26% to Rs 1,051.26 crore in Q2 FY26, compared to Rs 832.17 crore in the year-ago period. During the quarter, profit jumped 70% to Rs 69.7 crore. PhysicsWallah is yet to report its Q3 FY26 results.