PhysicsWallah: JPMorgan Buy call, ₹125 target in 2026

Stock in focus after JPMorgan initiates coverage

PhysicsWallah shares came into focus after JPMorgan initiated coverage on the edtech company with an ‘Overweight’ rating and a price target of ₹125. The target implies an upside of about 14% from a market price of around ₹110 cited in the note. During the session, the stock traded higher, reflecting renewed attention from investors after the global brokerage’s initiation. At 11:44 AM, PhysicsWallah shares were up 2.7% at ₹109.98 per share. The stock also touched an intra-day high of ₹111.2, marking a gain of 3.8% for the day.

How the broader market traded alongside the move

The strength in PhysicsWallah was seen against a generally positive tape. The BSE Sensex was up 0.77% at 79,122.61 when the stock was quoted higher. The move in PhysicsWallah was therefore not isolated, but it still stood out due to the brokerage initiation and the target price headline. Separately, the report also cited the stock gaining around 4%, consistent with the day’s high print and intraday traction.

What JPMorgan is betting on: the test prep market

JPMorgan’s positive view rests on the expected expansion of India’s test preparation market. Citing Redseer, the brokerage note projected the test prep market to grow at a 13% compound annual growth rate (CAGR) over FY25-30, reaching $13-25 billion. This market size and growth trajectory is central to the brokerage’s thesis that scalable education delivery models can continue to compound demand. The note also highlighted that the market still has areas with limited access, which can support growth for lower-cost, large-reach platforms.

Faster growth expected in online test prep

Within the broader test prep market, JPMorgan pointed to sharper growth in online test prep. The online segment is expected to expand at a 29% CAGR over FY25-30 to $1-6.5 billion, and one reference in the note placed this at up to ₹54,600 crore. JPMorgan said PhysicsWallah is well-positioned to capture this opportunity, tying the company’s model to the expected shift in consumption toward online formats. The brokerage described PhysicsWallah as having disrupted online test prep with a low-cost content delivery approach.

The business model JPMorgan highlighted

In the coverage note, JPMorgan flagged PhysicsWallah’s low-cost online model as a key strength. It referred to the company’s “one-to-many” digital delivery technology as a support for scaling to a large base of students. The note also linked affordability to broader reach, stating that the company’s pricing can appeal across income segments. This cost structure was presented as an advantage in building scale in online education and test preparation.

Growth and margin expectations for the online segment

JPMorgan said it primarily likes PhysicsWallah’s online business. It expects the online business to grow at 30% over FY26-28, driven by increasing penetration of new courses, student additions, and higher realisations from premium offerings. The note also projected margin expansion, with margins expected to improve from 30% to 33% over the same period. In a separate Hindi-language section of the provided material, the brokerage expectation was described as revenue growing at a 28% CAGR over FY26-28E, along with a 30% revenue growth view for the online business and scope for margin improvement.

Valuation framework: SOTP and different multiples

JPMorgan said it valued PhysicsWallah using a sum-of-the-parts (SOTP) method. Under this approach, it assigned a 30x EV/Ebitda multiple to the core online and hybrid test prep business. It also used a lower 10x EV/Ebitda multiple for the offline centres business. The use of two different multiples reflects the note’s preference for the online engine while still factoring in the offline expansion.

Offline and hybrid centres: acknowledged, but valued lower

While the brokerage’s emphasis was on online, the note also referred to offline and hybrid centres as an additional lever. The Hindi-language portion of the material suggested these centres could move toward profitability as utilisation rises. JPMorgan’s SOTP valuation, however, used a lower multiple for the offline centres business, signalling more conservative assumptions relative to the core online and hybrid test prep segment.

Other brokerage views also mentioned

The broader compilation of text also referenced domestic brokerage JM Financial’s view on PhysicsWallah. JM Financial assigned a Buy rating with a target price of ₹110, and in one section it described this target as for March 2027. JM Financial also used a split valuation approach, valuing the online business at a 30x adjusted EBITDA multiple and the offline business at a 10x multiple, while noting higher scaling risks and geographic challenges in offline expansion. These references place JPMorgan’s coverage call in a wider context where analysts are drawing a clear distinction between online scale economics and offline rollout risks.

Key data points at a glance

Recent financial datapoint cited in the material

Separately, the provided text also referenced PhysicsWallah’s Q3 FY26 results. It stated revenue grew 34% year-on-year to ₹1,082 crore and profit after tax (PAT) was ₹102 crore, despite one-time expenses of ₹23 crore. While this datapoint was not presented as part of JPMorgan’s initiation note in the text, it was included in the broader set of information supplied alongside the market reaction.

Why the initiation matters for investors

A global brokerage initiating coverage typically increases the volume of publicly available assumptions around market size, segment growth, and valuation benchmarks. In this case, JPMorgan’s note anchored its thesis to a large and growing test prep market and to the faster-growing online segment in particular. The explicit use of SOTP and different EV/Ebitda multiples also puts a clear framework around how the market may differentiate between PhysicsWallah’s online scale and its offline centre expansion.

Conclusion

PhysicsWallah shares rose during the session as JPMorgan initiated coverage with an Overweight rating and a ₹125 target, underpinned by expectations of rapid online test prep growth and margin expansion. The market will track whether the company’s online growth assumptions and improving profitability, as referenced in recent quarterly numbers, align with the brokerage’s outlined trajectory over FY26-28.