We see PhysicsWallah (PW) as a ‘recession-proof’ sweet spot at a time when investors are increasingly worried about the possibility of elevated global crude oil prices and depreciating currency translating into higher inflation and, thereby, putting pressure on household disposable incomes. In the Indian context, education is a non-discretionary priority—it is the expense households are least willing to cut due to its role in economic mobility. This cultural imperative aligns perfectly with PW’s high-value, low-cost disruptive model that undercuts traditional incumbents. Furthermore, with negligible exposure to fuel price volatility, the company is uniquely insulated from inflationary shocks. We, therefore, believe that an economic slowdown or a spike in living costs will serve as a catalyst for PW, driving students from expensive legacy institutes toward this more affordable alternative. We continue to value PW on an SotP-basis, assigning a higher adjusted EBITDA multiple to online (30x) than offline (15x), reflecting our view that the digital segment remains the primary workhorse and valuation anchor. Overall, we maintain BUY on PW with a Mar’27E TP of INR 110 (implying an FY28 PER of 70x).
Reiterate BUY on PW with a TP of INR 110: In our view, PW remains well positioned to gain amidst macro headwinds due to its core value proposition of affordability and quality. It also benefits from growing preference for hybrid learning models across tier-2+ cities. Overall, we value the online business at 30x adjusted EBITDA as we see strong growth visibility and potential for margin expansion. While PW has made meaningful progress in offline, we assign a relatively lower multiple of 15x adjusted EBITDA, building in a prudent view on execution. We maintain BUY with an unchanged TP of INR 110.
