Last week, PhysicsWallah used its Q4 earnings to quietly redraw one of its most debated expansion plans: K-12 schools.
After investors questioned how far India’s only listed edtech firm would venture into schools, offline coaching, and other adjacencies, the Noida-based company told the market that its K-12 ambitions will now be pursued largely through an asset-light, online-led route. It will not deploy further capital in schools and limit its revenue contribution to less than 1%.
The clarification came after PhysicsWallah’s stock faced heat following early, post-listing enthusiasm, after some investors questioned whether the company was moving away from the low-cost online engine they had bought into.
“We decided to go asset-light in the K-12 market,” Prateek Maheshwari, cofounder of PhysicsWallah, told ET after the results. “The focus will be school partnerships, state boards, Curious Junior (its K10 platform), and online foundation courses.”
That is a meaningful shift in tone from the previous quarter, when PhysicsWallah had spoken spiritedly about schools as a long-term opportunity. On its Q3 earnings call, the company management said K-12 was four times the size of test prep and could become larger than test prep for PhysicsWallah over the next five years.
The company also spoke of operating schools in Indore, Gurugram, and Varanasi, starting more schools, and taking management control of Tender Heart in Ranchi.
That triggered questions among investors, because managing schools is very different from running coaching centres or online courses. One public market investor who tracks the company said PhysicsWallah’s post-listing emphasis on K-12 surprised investors, who had largely bought into an online test-prep and offline coaching story. “Investors hate surprises,” he said. “They don’t like not being told properly what the company is planning.”
Another investor was more direct: “Why should you get into K-12? What is your knowledge of running K-12 schools? This is a very complicated business. You need lots of focus.”
PhysicsWallah is very different from earlier listed names in education that went wrong. It has a large online funnel, strong treasury, and limited balance-sheet stress. Still, Educomp Solutions’ collapse continues to sit at the back of public market investors’ minds when education companies move from scalable learning models into businesses linked to schools, infrastructure, and heavier execution.
That is why the latest clarification matters. PhysicsWallah is not abandoning K-12. It is trying to tell investors that K-12 does not mean a capital-heavy model. It will be an online-led funnel into younger cohorts, through state boards, Curious Junior, CUET, online foundation courses, and school partnerships, where its teachers go into existing schools without owning the asset.
The context has also shifted because Indian edtech is consolidating. ET reported last month that Ronnie Screwvala-run upGrad is set to acquire Unacademy in an all-stock deal valuing the Bengaluru-based test-prep firm at Rs 2,055 crore, more than 90% below its peak valuation of $3.4 billion. The deal does not immediately threaten PhysicsWallah’s lead, but it gives public investors another large education platform to compare India’s only listed edtech against.
PhysicsWallah’s FY26 numbers give it room to make its case. Revenue from operations grew 35% year-on-year (YoY) to Rs 3,900 crore, while Ebitda rose to Rs 300 crore from Rs 94 crore in FY25. The company reported a profit before tax of Rs 10 crore, while its treasury stood at Rs 5,027 crore as of March 31. Q4 revenues rose 51% YoY to Rs 919 crore, though the quarter remained seasonally soft as old batches wound down and the new academic cycle began.
New K-12 framework
The company’s new K-12 framework rests on four legs.
The first is school integration, where PhysicsWallah sends teachers into existing schools and shares revenues without owning the school. Maheshwari said collections from this bucket grew three times in FY26.
The second is state boards, which PhysicsWallah is treating as a large online market rather than an offline opportunity. In a letter to shareholders, the company said that state boards and courses in regional languages scaled to 393,000 enrolments in FY26 and turned Ebitda positive in the first year of operations. Maheshwari said the state boards business saw a ninefold revenue jump from FY25 to FY26.
The third is Curious Junior, which Maheshwari said recorded a fourfold revenue increase. The fourth is online foundation and board-focussed courses, including CUET.
“All our strategies are online, so there is no capex,” Alakh Pandey, cofounder and CEO of PhysicsWallah, said on the earnings call, and added that schools already under PhysicsWallah will remain a small, single-digit set, and comprise less than 1% of its revenues.
Elara Securities had earlier described school integration as a lifecycle lever that could help PhysicsWallah enrol learners earlier and later move them into foundation, JEE, and NEET cohorts. But the brokerage also said the initiative should be treated as an option rather than a near-term earnings driver, with the model needing to be proven before it is scaled meaningfully.
That distinction is central to the story. K-12 remains attractive because it gives PhysicsWallah access to students earlier in their academic journey. But the public market will likely reward the company only if it can pursue that without looking like a schools operator.
Maheshwari told ET the company had taken feedback from its board, early investors, and public market investors before changing tack. The approach, he said, is similar to what PhysicsWallah did in test prep: first build online scale, then decide how much physical expansion a category deserves.
Online remains the engine
The K-12 reset is part of a broader message post Q4: PhysicsWallah wants to bring the market’s attention back to its online play.
The company’s online business comprised 50% of its FY26 revenues; the management wants this to rise to 55%. Maheshwari said 91% of PhysicsWallah’s paying learners study online, making it a truer representation of the business. “We wanted to give this message to the market loud and clear, that we are an online-first company,” he told ET. “Online is the heart of what we do.”
Online revenues grew 39% YoY to Rs 1,954 crore in FY26, while offline grew 31% to Rs 1,774 crore. Unique transacting users online rose 18% to 4.87 million, while average collection per user expanded 11.4% to Rs 4,104. Offline enrolments crossed 470,000, but ARPU fell 9% because of a change in the mix.
Maheshwari said engineering and medical test prep are growing at about 20%, while state boards, vernacular markets, and newer categories are growing more than 100%. On a blended basis, he said online should continue to grow at 35-40%.
Elara Securities said PhysicsWallah’s growth is shifting beyond core JEE and NEET prep into foundation, board, and government exams, reducing reliance on a single exam cycle. JM Financial assigns an adjusted Ebitda multiple of 30x to its online and 15x to its offline businesses, calling the digital segment PhysicsWallah’s primary workhorse and valuation anchor.
The offline business remains large, but it is now being framed more around profitability than expansion. PhysicsWallah runs 353 offline centres across 178 Indian cities and six in the UAE. Vidyapeeth, its most mature offline format, comprises about 70% of the firm’s offline revenues.
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The company’s management said its net losses improved from minus 19% in FY25 to a little under minus 10% in FY26, and guided for net offline profitability in FY27. It also said 60% of Vidyapeeth centres are profitable and the offline business is targeting steady-state offline margins of 13-15% in the medium term.
Maheshwari told ET the company has already opened 70 centres this year and will take a more balanced approach after the current enrolment season. “The idea is to focus more on profitability than expansion,” he said.
AI is another piece of the online story. Maheshwari said existing products such as AI Guru, AI Grader, Ask AI, and AI Books are bundled with current offerings, while an AI tutor will be launched as a separate product. “This year we will be launching our AI tutor. That will be a huge step in terms of AI-led revenue generation,” he said.
But again, without diluting the cost advantage that made investors buy the PhysicsWallah story in the first place.
