Physicswallah Limited

Consumer Defensive — Education & Training Services · NSE

₹134.13−₹2.20 (−1.61%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Physicswallah Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Physicswallah Limited offers online and offline coaching and study material for test preparation of various competitive exams in India.

IndustryEducation & Training Services

SectorConsumer Defensive

Employees16,289

Annual revenue₹3,877 Cr

How does it make money?

Turns over ₹3,877 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 16,289 employees supports ₹23.8 lakh of revenue a year, the signature of a people-led business.

EBITDA margin12.1%

Net margin-0.6%

Revenue / employee₹23.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

What is its competitive advantage?Little sign of one

Returns on capital of 1.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE1.6%

ROE-0.5%

Peer median ROE51.0%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 24.6% and earnings to grow about 85.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+24.6%

Est. earnings growth+85.9%

Analysts8

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +423% while net margin moved -95% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+423%

Margin effect-95%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

52/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

24/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

1676.6x

Sector Median

43.3x

median of 4 sector peers

⚠️Against its sector it trades 3775% above the peer median of 43.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

43.3x median of 4 peers · +3775%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

1676.6x

P/B

8.55x

EV/EBITDA

84.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 10.2% to 12.1% over 3 years.
Cash generation is improving
Free cash flow is up 295% over 3 years.
Return on capital is rising
ROCE has improved from -4.4% to 1.6%.
Very low debt
Debt/Equity of 0.23x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Debt is rising
Total debt is up 85% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 546% against revenue growth of 423% — customers are taking longer to pay.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 85% over 3 years, from ₹570 Cr to ₹1,052 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.1x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹22 Cr in the latest reported year.
🔴Receivables growing faster than salesFinancial
Receivables up 546% against revenue up 423% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 10.2% to 12.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹490 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 546% against revenue up 423%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 3775% above the peer median. That premium needs a reason that persists, or it closes.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 55% a year✓ 73.6% CAGR
Latest reported year was 23.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Interest cover stays above 3x✗ 1.1x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹490 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 2 neutral · 4 weak

Market Cap

₹39,014 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

1676.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.55x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹0.08

Profitable

Profitable on a per-share basis

ROE

-0.5%

Weak

Weak capital efficiency

ROCE

1.6%

Weak

Low return on total capital employed

Debt/Equity

0.23x

Low

Conservative leverage

Revenue Growth (YoY)

23.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

89.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹490 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹134.13

P/E (Forward)

64.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

-11.7%

Weak

Thin margins leave little room for error

Net Margin

0.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.90

Comfortable

Healthy short-term liquidity

52W Range Position

67%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

134.2 / 127.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

49.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹741 Cr	₹1,933 Cr	₹2,874 Cr	₹3,877 Cr	+73.6%
EBITDA	₹75 Cr	-₹161 Cr	₹234 Cr	₹468 Cr	+83.9%
EBITDA Margin	10.2%	-8.3%	8.1%	12.1%	—
PAT (Net Profit)	-₹81 Cr	-₹1,040 Cr	-₹216 Cr	-₹22 Cr	—
EPS	₹-0.28	₹-3.64	₹-0.75	₹-0.08	—
ROE	—	—	-14.2%	-0.5%	—
ROCE	-4.4%	-80.7%	-6.7%	1.6%	—
Total Debt	₹570 Cr	₹847 Cr	₹997 Cr	₹1,052 Cr	+22.7%
Free Cash Flow	₹124 Cr	-₹24 Cr	₹335 Cr	₹490 Cr	+58.1%

🟢 Revenue has grown at 73.6% a year over 3 years.

🟢 EBITDA has grown at 83.9% a year over 3 years.

🟢 EBITDA Margin has risen from 10.2% to 12.1% over 3 years (+1.9 pts).

🟢 ROE has risen from -14.2% to -0.5% over 3 years (+13.7 pts).

🟢 ROCE has risen from -4.4% to 1.6% over 3 years (+6.0 pts).

🔴 Total Debt has grown at 22.7% a year over 3 years.

🟢 Free Cash Flow has grown at 58.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,677 Cr

Total Liabilities

₹3,106 Cr

Total Debt

₹1,052 Cr

Cash & Equivalents

₹360 Cr

Operating Cash Flow

₹833 Cr

Capex

-₹343 Cr

Shareholding (proxy)

Institutional Holding

22.3%

Insider Holding

71.1%

Analyst Consensus

Recommendations

6 Buy · 1 Hold · 2 Sell

Target Price (Mean)

₹145.44

+8.4% vs CMP

Target Range

₹110 – ₹200

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 positive4 mixed1 general

Physicswallah Share Price: Up 41% YTD, Rs 200 Target in Focus

Univest, 08 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Why Did Physicswallah Share Price Zoom 5% Today? Motilal Oswal Sees 66% Upside

NDTV Profit, 04 Sept

Physicswallah shares rally 18%, snap 5-day losing streak. What's behind the surge?

The Economic Times, 04 JunPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Alakh Pandey-led Physicswallah shares up 42% in 6 months; Motilal Oswal sees further upside - Reason, target price

Livemint, 08 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Earnings Update: Physicswallah Limited (NSE:PWL) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Simply Wall Street, 19 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

PhysicsWallah share price rallies 9% as Q1 loss narrows, revenue rises 24%

Business Standard, 17 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟡Financial HealthAdequate12.7/20

🟢GrowthStrong13/20

🔴ProfitabilityWeak3.2/15

🔴ValuationDemanding3.2/15

🔴RiskHigh4.3/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 55% a year73.6% CAGR
✓EBITDA margin holds above 10%12.1%
✗Debt / EBITDA stays below 2x2.2x
✗Interest cover stays above 3x1.1x
✓Free cash flow remains positive₹490 Cr