The second quarter of the 2027 fiscal year marked a turning point for PhysicsWallah (PW), as scaling up and improving operational efficiency led to record quarterly revenue and doubled net profit.
Founder and CEO Alakh Pandey stated that the company achieved record revenue and significantly improved profitability, while the student base continues to grow in K-12 segments, local languages, and new categories. He emphasized that the company's focus remains on scaling accessible, technological education with disciplined capital allocation.
For the second quarter of the 2027 fiscal year (July to September 2026), PW recorded its highest quarterly revenue in history, driven by an increase in enrolled students and improved course delivery. Consolidated operating revenue reached ₹1242.26 crore, which is 18.2% higher compared to the same period last year. Total income, including other non-operating receipts, increased by 21.5% year-on-year to ₹1334.64 crore.
The company operates through two main service delivery channels, as well as auxiliary services. The online channel remained the primary driver of revenue growth, generating ₹693.52 crore in operating revenue for the quarter. This represents a 26.4% year-on-year growth compared to ₹548.72 crore the previous year and accounts for 55.8% of total operating revenue. The offline channel contributed ₹540.87 crore, which is 9% higher than ₹496.10 crore the previous year, making up 43.5% of operating revenue.
Other operating streams, such as YouTube advertising, hardware sales, and institutional support, brought in ₹7.87 crore, showing a 22.4% year-on-year growth.
Profitability significantly increased because fixed platform, content, and educational infrastructure costs were spread over a wider user base. Consolidated profit after tax doubled to ₹142.29 crore in the second quarter, a 104.1% increase compared to ₹69.72 crore the previous year. It is important to note that the net profit in the second quarter of the 2027 fiscal year was realized after a loss of ₹87.04 crore in the first quarter of the 2027 fiscal year.
The profit margin after tax, calculated as net income divided by operating revenue, expanded by 482 basis points to 11.5% from the previous 6.6%. Earnings before tax grew by 111.6% year-on-year to ₹209.15 crore. This amount included a one-time goodwill impairment charge of ₹20 crore and an increase in fair value of financial instruments of ₹10 crore.
EBITDA, according to Indian Accounting Standards (IndAS), reached ₹348 crore, providing a margin of 28.0% compared to ₹228 crore and a margin of 21.7% in the same period last year. Adjusted EBITDA, which accounts for fair value adjustments and lease obligations, grew to ₹399 crore with a margin of 32.1%, compared to ₹270 crore and 25.7% previously. Cash EBITDA before IndAS grew by 45.0% year-on-year to ₹233 crore, raising the margin to 18.8% from 15.3%.
Total consolidated operating expenses amounted to ₹1105.43 crore. The largest cost center was employee benefits at ₹522.38 crore, including ₹482 crore in basic salary and ₹40 crore in non-cash stock-based compensation. Other operating expenses totaled ₹237.58 crore, with marketing, advertising, and public events accounting for ₹87.92 crore.
The online segment benefited from increased student engagement and higher enrollments. The number of unique users transacting online grew by 12.9% year-on-year to 1.5 million for the quarter, while the average fee per user increased by 10.6% year-on-year to ₹4280. Growth was supported by high demand for premium course packages, as revenues from Infinity and Infinity Pro collections rose by 49% in the second quarter.
Expansion also occurred in more expensive non-medical categories: the average fee for civil services increased by 34.2%, GATE grew by 30.7%, preparatory courses by 22.6%, and MBA programs by 21.4%.
During the quarter, there was an operational shift in demand for medical entrance preparation. The postponement of the NEET UG 2026 exam results until July 16 delayed student admissions, shifting a significant portion of enrollment activity into the second quarter. Consequently, online enrollments for NEET grew by over 30% year-on-year over the three-month period.
In the offline segment, revenue reached ₹541 crore across 370 physical centers, compared to 314 centers the previous year. The offline channel recorded an EBITDA before IndAS loss of ₹8 crore in the second quarter, a decrease compared to previous periods due to improved resource utilization in mature centers.
Company management has intentionally slowed down physical expansion to 25–30 new centers annually to focus on center-level profitability and smaller footprint models. To optimize capital deployment, PW sold a portfolio of loans worth ₹96 crore from its subsidiary FinZ Finance Private Limited to Auxilo Finserve Private Limited on October 3.
The integration of artificial intelligence has enhanced operational efficiency on learning platforms. The company reported that automated systems resolve 80% of student support queries without human intervention and generate 92% of internal source code. Furthermore, the company is developing AI Tuto—a voice-based 1:1 conversational tutor, estimated to cost ₹17 per hour to serve students.
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