Startup Deep Dive : Physics Wallah — profitable for three years, then it lost Rs 1,131 crore on purpose

Physics Wallah made a profit for three years running, undercutting every big coaching chain in India on price, before it ever took serious venture money. Then, in the financial year it built out a national network of physical centres, the same company reported a loss of ₹1,131 crore — a swing so sharp that a business built on being cheap and disciplined suddenly looked like every other cash-burning edtech startup it had spent years avoiding being compared to.

What happened next is the more interesting part. Physics Wallah narrowed that loss for two straight years, crossed ₹3,900 crore in revenue, and listed on the Bombay and National Stock Exchanges in November 2025 — becoming, depending on who is counting, either India’s most disciplined edtech success or a company that got lucky with timing just before it, too, started spending like the rest of the sector. Both readings have evidence behind them.

Quick facts

What they do

Physics Wallah sells exam preparation to Indian students chasing two of the country’s most competitive entrance tests, NEET for medicine and JEE for engineering, plus school-board and foundation courses for younger students. It started as free physics lectures on YouTube and grew into a paid app-based course business, and it now also runs physical coaching centres, sells its own printed study material, and, through its acquisition of iNeuron, offers technology upskilling courses aimed at a slightly older, working audience. The common thread is a promise that has not changed since the YouTube days: exam coaching that costs a fraction of what established brick-and-mortar chains charge.

The origin

Alakh Pandey, a physics teacher from Prayagraj in Uttar Pradesh, began posting lecture videos on YouTube under the handle Physics Wallah, building an audience by giving away content that coaching institutes in hubs like Kota charged lakhs of rupees for (Storyboard18; Wikipedia, accessed September 2026). The channel crossed several million subscribers well before it had a formal business behind it. The insight was simple: a huge number of Indian families wanted serious NEET and JEE coaching but could not afford the fees charged by established players, and a smartphone-first, low-price course could serve them profitably at volume rather than through venture-funded discounting. In 2020, Pandey formalised the channel into a company, Physics Wallah Private Limited, bringing in Prateek Maheshwari — an IIT graduate who had previously founded the ventures PenPencil and Night Panda — as co-founder and product lead, while Pandey stayed the face of the brand and its content strategy (Wikipedia, accessed September 2026).

The struggle years

The company’s most public crisis had nothing to do with money. In March 2023, several senior faculty members resigned from Physics Wallah in a very public and messy split, after being accused internally of taking bribes worth ₹5 crore from rival edtech company Adda247 to poach students; the teachers denied the allegations on camera, and the incident spilled across social media for days (Business Today, 26 March 2023). It was a reminder that a company built around a handful of star teachers, whose credibility is the whole product, is exposed whenever those teachers and the company disagree publicly.

The second struggle was financial and self-inflicted by design. Having stayed profitable through FY23 — reporting a standalone net profit of about ₹9 crore that year, down from ₹98 crore in FY22, as expenses grew faster than revenue even then (Inc42, December 2023) — the company’s consolidated numbers swung hard in FY24. Total expenditure jumped roughly 280% even as revenue grew 2.6 times, employee costs alone rose to ₹1,159 crore, and non-cash charges tied to ESOP costs and the fair-value accounting of convertible preference shares added further to the reported number, taking the net loss to ₹1,131 crore for the year (Entrackr, November 2024; Inc42, November 2024). Strip out those non-cash items and the adjusted loss was closer to ₹375 crore — still a sharp reversal, but a very different story from the headline figure, and the company said as much at the time (Entrackr, November 2024).

The turning point

The clearest turning point is the listing itself. Physics Wallah filed to go public carrying the scars of that FY24 loss and a FY25 loss of ₹243 crore, still a private company last valued by investors at $2.8 billion in September 2024 (Deccan Herald; TechCrunch, 19 September 2024). It opened its initial public offering on 11 November 2025, priced shares at ₹109, and raised about ₹3,480 crore through a mix of fresh issuance and a partial exit for its founders. On listing day, 18 November 2025, the stock closed at ₹156.49, a 44% gain over the issue price, valuing the company at roughly ₹44,800 crore (about $5 billion) on its first day of trading (TechCrunch, 18 November 2025). A company that had been publicly bleeding money eighteen months earlier was, for one day at least, being priced by the market as worth more than its last two private funding rounds combined.

The money behind it

Physics Wallah raised comparatively little private capital before going public — about $310 million in total, across two disclosed institutional rounds (CB Insights, accessed September 2026). WestBridge Capital and GSV Ventures came in first, in June 2022, as part of a $100 million round that made Physics Wallah a unicorn at a valuation of roughly $1.1 billion (Wikipedia; Deccan Herald, September 2024) — notable at the time because the company had already proven it could be profitable without that money, unlike most Indian edtech unicorns of that era. WestBridge and GSV’s early backing funded the first wave of offline Vidyapeeth centres and helped professionalise the company’s finance and governance ahead of a possible listing.

The second and larger round came in September 2024: $210 million led by Hornbill Capital, with Lightspeed Venture Partners as a new investor alongside returning backers WestBridge and GSV, valuing the company at $2.8 billion — a 2.5 times jump from 2022 (TechCrunch; YourStory, 19-20 September 2024). That capital, and the credibility that came with marquee names like Lightspeed, is what bankrolled the aggressive push in offline centre count that followed, from 67 centres across 34 cities in November 2023 to well over 300 two years later. The IPO itself, in November 2025, was the company’s first real fundraise from the public market, with roughly ₹3,100 crore of the ₹3,480 crore raised going into the business itself rather than to selling shareholders (IndianStartupNews, 2025).

How it makes money

The core of the business is a one-time course fee rather than a subscription: students pay a flat amount, commonly ranging from about ₹1,999 for a basic online NEET plan up to ₹10,500-₹12,000 for a more complete package, and get a full batch’s worth of live classes, recorded lectures and test series bundled in (company course listings, accessed September 2026). Established coaching chains have historically charged anywhere from ₹25,000 to well over ₹1,00,000 for comparable NEET or JEE preparation, so Physics Wallah’s entire pitch rests on serving a much larger number of students at a much lower price per student and making the margin back on volume, cross-sold test series, books and upskilling courses, rather than on a high price per customer.

The part people get wrong is assuming this is still a YouTube-and-app business with software-like margins. It increasingly is not. Physical centres carry rent, faculty salaries and depreciation on fit-outs that a purely digital course never does, and those costs land whether or not a batch is full. That is precisely why the shift from an asset-light online model to a capital-intensive offline network is the single biggest swing factor in the company’s profitability from FY24 onward — the online business is the cash generator, and the offline business is the growth bet that has yet to consistently pay for itself.

The numbers

The four-year run shows the swing clearly: three years of modest profit at a much smaller revenue base, followed by a much bigger, faster-growing business that briefly lost a great deal of money before clawing back towards breakeven. Figures below are from the company’s consolidated financial statements as disclosed for its IPO and tracked post-listing (Screener.in, accessed 18 September 2026; Inc42; Entrackr).

Two things are worth flagging in that table. First, the FY23 figure differs depending on which entity is being measured: on a standalone basis, the flagship Physics Wallah company itself reported a small net profit of about ₹9 crore that year, its third consecutive profitable year, while the wider consolidated group — including subsidiaries acquired around that time — reported a loss (Inc42, December 2023; Screener.in, 2026). Second, the FY26 improvement was not just about growing revenue; EBITDA more than doubled to ₹549 crore from ₹193 crore in FY25, taking the EBITDA margin from 6.7% to 14.1% (Outlook Business, 2026), which is a cleaner signal of underlying operating improvement than the net loss line alone.

Where the money comes from

In FY26, Physics Wallah’s online business brought in about ₹1,954 crore, up 39% year-on-year, while its offline centres contributed about ₹1,774 crore, up 31% (Outlook Business, 2026). The centre count driving that offline number grew fast: from 198 locations at the end of FY25 to 353 by the end of FY26, and the company described operations spanning well over a hundred cities, including a small presence in the Middle East, around the time of its IPO (TechCrunch, 18 November 2025).

The surprise sits in who is paying for what. The company’s FY26 disclosures put paid users at 5.34 million, made up of about 4.87 million online users and roughly 0.47 million offline students (Outlook Business, 2026). Run the two segments’ revenue against those user counts and the offline centres, with under a tenth of the paying user base, are generating close to half of total revenue — because a seat in a physical Vidyapeeth or Pathshala centre costs many times what an online batch does. Offline is a smaller, pricier business bolted onto a much larger, cheaper one, not simply a bigger version of the same product.

The risks

The first risk is that offline profitability has not caught up with offline revenue growth. Reporting on the company’s own segment disclosures found offline operations still running a pre-Ind AS EBITDA loss of about ₹113 crore in the first quarter of FY26, narrowing only slightly to about ₹106 crore the following quarter, with the negative margin improving from 26% to 22% (Inc42, 2025). Centres carry fixed lease and faculty costs regardless of how full a batch is, so a slowdown in enrolments hits offline margins faster than it hits the online business.

The second is that offline demand is not guaranteed to keep growing everywhere the company opens. Kota, the coaching town where Physics Wallah opened its first physical centre in 2022, has itself seen enrolments and centre revenue fall by around 40% as students and rival chains recalibrate, according to Inc42’s review of the company’s own numbers (Inc42, 2026). A national rollout built on a template proven in one city carries the risk that the same pattern repeats as each market matures and gets more competitive.

The third is reputational and regulatory, and it is disclosed by the company itself. Its IPO papers referenced specific safety incidents at offline centres, including a student threatening a teacher during a live class in 2023, a staff member filmed pushing a student, and a ceiling fan injuring a student at a Delhi facility in 2024 (company DRHP disclosures, reported September 2025). Coaching centre safety has become a live regulatory issue in India more broadly, and any tightening of rules around fees, facilities or faculty qualifications would raise the cost of running hundreds of physical centres at once.

The takeaway

The transferable lesson is not “stay small and profitable forever” or “growth always requires losses” — it is that a company can genuinely prove a low-cost, high-volume model works before it ever spends real growth capital, and then still take a bruising, well-documented step backward the moment it deploys that capital into a fundamentally different cost structure. Physics Wallah’s online business is the proof that its original insight — serious exam coaching at a fraction of the going rate — was never a subsidised illusion; its offline business is the reminder that a good idea, executed with someone else’s money at speed, tests a company’s discipline in ways its original bootstrapped years never did.

Frequently asked questions

Is Physics Wallah profitable?

Not yet at the net income line, but it is close. The company narrowed its net loss to ₹24 crore in FY26 (year to March 2026) from ₹243 crore in FY25, and its EBITDA turned solidly positive at ₹549 crore with a 14.1% margin in FY26 (Outlook Business, 2026).

Is Physics Wallah listed on the stock market?

Yes. PhysicsWallah Limited listed on the NSE (ticker PWL) and BSE (code 544609) on 18 November 2025, after an IPO priced at ₹109 a share that raised about ₹3,480 crore (TechCrunch, 18 November 2025).

Who owns Physics Wallah?

Founders Alakh Pandey and Prateek Maheshwari together held about 80% of the company before the IPO. Institutional investors include WestBridge Capital and GSV Ventures, who invested in 2022, and Hornbill Capital and Lightspeed Venture Partners, who joined in 2024 (Wikipedia; TechCrunch, September 2024).

How much is Physics Wallah worth?

As of mid-September 2026 its market capitalisation was around ₹39,600 crore, roughly $4.1 billion (Screener.in, 18 September 2026). That compares with a $2.8 billion valuation in its last private funding round in September 2024 and a roughly $5 billion valuation on its first day of trading in November 2025 (TechCrunch, 18 November 2025).

How does Physics Wallah make money?

It charges a one-time course fee, typically between about ₹1,999 and ₹12,000, for online NEET and JEE preparation, well below what established coaching chains charge, and earns additional revenue from pricier offline centre seats, printed study material, test series and upskilling courses under its iNeuron brand.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Wikipedia, “Physics Wallah” (accessed September 2026)
• TechCrunch, “India’s Physics Wallah raises $210M at $2.8B valuation” (19 September 2024)
• TechCrunch, “Physics Wallah enjoys a rosy IPO day, bucking the broader slowdown in Indian edtech” (18 November 2025)
• Deccan Herald, “Physics Wallah’s valuation hits $2.8 billion, latest funding round brings $210 million” (September 2024)
• YourStory, “Investors bet big: PhysicsWallah bags $210M in tough edtech funding climate” (September 2024)
• CB Insights, PhysicsWallah company and funding profile (accessed September 2026)
• Inc42, “PhysicsWallah’s FY23 Profit Tanks 91% To INR 9 Cr” (December 2023)
• Inc42, “Physics Wallah In The Red, Posts INR 1,131 Cr Loss In FY24” (November 2024)
• Entrackr, “PhysicsWallah revenue jumps 2.6X to Rs 2,015 Cr in FY24, slips into losses” (November 2024)
• Inc42, “PhysicsWallah FY25: Loss Down 78% To INR 243 Cr, Revenue Nears INR 3,000 Cr Mark” (2025)
• Business Standard, “PhysicsWallah FY25 revenue rises 50 percent ahead of IPO” (2025)
• IndianStartupNews, “PhysicsWallah files updated DRHP for Rs 3,820-crore IPO; Alakh Pandey to sell shares worth Rs 360 crore” (2025)
• Outlook Business, “PhysicsWallah slashes FY26 losses as revenue jumps 51%, bets big on AI and offline expansion” (2026)
• Screener.in, PhysicsWallah Ltd consolidated financials (accessed 18 September 2026)
• Business Today, “PhysicsWallah caught in controversy as ex teachers cry on camera, deny charges of Rs 5 cr bribe” (26 March 2023)
• Inc42, “PhysicsWallah’s Product Gamble & Shrinking Profits” (2026)
• Storyboard18, “Who is Physics Wallah founder Alakh Pandey? From YouTube teacher to India’s EdTech giant” (accessed September 2026)

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