Physicswallah Ltd Q4 FY26 Earnings Call: Guides >30% Revenue Growth, Online Revenue Crosses 50% Mix

Physicswallah Ltd held its Q4 FY26 earnings call on May 27, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

FY26 Closes with Rs.3,900 Cr Revenue; EBITDA Triples

• FY26 revenue from operations— Rs.3,900 Cr, up35%YoY (FY25: ~Rs.2,889 Cr implied).
• Q4 FY26 revenue— Rs.919 Cr, up51%YoY, accelerating from ~30% in the first nine months.
• FY26 pre-Ind AS EBITDA— Rs.300 Cr,3xof FY25 (Rs.93 Cr); PBT turned positive at Rs.10 Cr vs -Rs.259 Cr in FY25.
• FY26 PAT— negative Rs.24 Cr (improved from -Rs.243 Cr in FY25); would have been positive excluding a Rs.63 Cr one-time adjustment for labor code implementation and IPO costs.
• FY26 operating cash flow— Rs.800 Cr; treasury stands at Rs.5,027 Cr (including ~Rs.2,300-2,400 Cr from IPO proceeds).
• Paid students— crossed4.9 millionin FY26, up20%YoY, with 10 lakh new enrollments across online and offline batches.
• Marketing spend— Rs.353 Cr, ~9% of revenue with 0.5pp leverage YoY; management targets a20%reduction in marketing cost over three years (by FY29).

Proprietary Small Language Model Powers Cost-Effective Tutoring at Scale

• 3.5 million daily active students— spending ~2 hours per day on the app, generating billions of data points as of Q4 FY26.
• Aryabhatta 2.0 (20B parameters)— under development, claiming "better accuracy than top frontier models at 1/10th the cost and 5x speed"; Aryabhatta 1.0 (4B params) already open-sourced.
• 91% of code now AI-assisted— driving a2ximprovement in engineering and go-to-market velocity.
• AI counselor— achieves75%cost savings, handling over6,000daily calls via AI voice agents.
• AI Guru— solved >100 millionacademic questions; AI grader evaluated >2 millionsubjective answer sheets.
• So-Critic AI tutor— planned launch inFY 2026-2027with positive beta results; management aims to become "the first Indian consumer internet company with an AI-led revenue stream".
• Online course ARPU of <Rs.4,000 (~Rs.10/day) for 4 hours of live lecture— proprietary SLM approach keeps AI tutoring cost-effective at this price point.

Online Revenue Crosses 50% Mix; State Board & Premium Batches Lead Growth

• Online revenue grew 39% YoYin FY26, now50.1%of total revenue (FY25: 48.6%); management targets55%contribution over the next three years (by FY29).
• State board segment— scaled10xin revenue and10xin enrollment during FY26; CUET and foundation courses saw similar traction.
• Premium batches(Infinity, Infinity Pro, Curious Junior, Power Batch) driving growth with no base batch price hikes; higher attachment rates for Infinity/Infinity Pro in FY25-26.
• ACPU improved >11%andARPU improved 12%in FY25-26, driven by premium mix shift.
• Online margins— estimated at26-27%; expansion expected as new categories (state board, foundation) scale at near-zero incremental cost per student.
• "Earners" skilling category— achieved over$1 millionin revenue and1 lakhenrollments in one month (early FY 2026-2027).
• NEET exam was cancelled in Q4 FY 2025-2026 due to a paper leak— but management cited this as cyclical; the regulator "NEET will become online from FY 2027-2028", expected to drive online enrollment growth.

Offline EBITDA Improves 9pp YoY; Break-Even Targeted in FY27

• Offline revenue— Rs.1,775 Cr in FY26, up31%YoY from 353 centers; Vidyapeeth contributes70%of offline revenue.
• Offline EBITDA margin— improved from-19%(FY25) to approximately-10%(FY26), a 9pp YoY gain.
• Vidyapeeth center profitability—60%(72 of 116) now profitable; older cohorts (FY22-24) all EBITDA-positive.
• Management guides offline EBITDA break-eveninFY 2026-2027; medium-term steady-state margin of13-15%, with some older centers above20%.
• Seat utilization— currently at2.0x, expected to improve to2.23xin coming periods, with a steady-state target of2.25x.
• Student-teacher ratio— currently in the80s; fresher faculty hires and6-9%ARPU improvement (partially offset by mix shift) supporting margin recovery.
• JEE/NEET categories (~70% of offline) remain highest-margin but are gradually declining below 30%— management attributed this to mix shift toward lower-margin state board and foundation courses.

FY27 Revenue Growth Guided >30% with >100% EBITDA I-Gap Improvement

• FY 2026-2027 guidance— revenue growth>30%, EBITDA improvement (I-gap) upwards of100%; management reiterated commitment to full-year PAT profitability in FY27.
• Vishwas Diwas 2026— online collections up36%YoY, generatingRs.200 Crover three weeks; enrollments +21%, add-to +12%.
• Vishwas Diwas performance grew 36% YoY— providing early confidence forFY 2027-2028planning.
• New growth levers for FY 2026-2027— 12-after-12th UPSC course, state boards, Free Foundation, and Curious Junior (grades 3-9, high ARPU).
• Offline growth— expected slightly lower than online; online remains the primary investment focus; offline expansion to close after FY 2026-2027 enrollment cycle.
• Seasonality— Q2 and Q3 are the strongest revenue quarters; Q4 is the strongest collection quarter.
• Segment reporting— SOTP for online and offline to be disclosed fromFY 2026-2027onwards; investor day planned in the coming months.

Asset-Light K-12 Pivot; NBFC Subsidiary Receives Rs.120 Cr Infusion

• K-12 strategy— shifting to100% asset-light; no further K-12 M&A capital allocation; a few single-digit brownfield management takeovers contribute <1% of revenue.
• NBFC subsidiary— Rs.120 Cr equity infusion into RBI-licensed entity for short-duration (<1 year) education loans; historically disbursed Rs.200 Cr with <1% NPA,70%of loans to PW students.
• School integration program—3xrevenue growth in FY26 vs FY25; state boards online9xrevenue jump; Furious Junior4xrevenue increase (all FY26 vs FY25).
• Sarthi acquisition (UPSC)— showing synergies; will remain an independent brand; focus on online community-led M&A with positive EBITDA assets.
• Southern India expansion— management in talks for partnerships with online-first players to deepen presence.
• Student dropouts and refunds— less than2%overall for the group in FY25-26, in line with management projections.
• No large-scale school-running plans— management confirmed focus remains on online segments (state boards, CUET, junior boards) and asset-light partnerships.