Stocks To Buy: Motilal Oswal 'bull case' sees up to 82% upside for this new-age company

Shares of Physicswallah gained nearly 6% on Friday, September 4, after brokerage firm Motilal Oswal initiated coverage with a target price implying a 66% upside.

Motilal Oswal has initiated coverage on PhysicsWallah with a "buy" rating and a target price of ₹200 per share.

The brokerage said Physicswallah is among India's largest education platforms, built on what it believes is one of the most capital-efficient business models in Indian EdTech. The company has built a large free-to-paid funnel via YouTube, enabling it to acquire students at structurally lower costs and monetise them across online, hybrid and offline offerings.

At present, it has one of India's largest education communities with over 100 million YouTube subscribers and it has compounded its revenue at 74% over financial year 2023-2026, Motilal Oswal observed.

It said India's education market remains significantly unpenetrated online. While the online penetration in flagship categories like JEE and NEET is just 20%, the penetration in new segments including state boards, foundation and government exams, remains below 1%, which provides a long runway for digital adoption, Motilal Oswal said.

Physicswallah's online business is its primary value driver. The brokerage estimates the company's online revenue to clock a 28% CAGR over FY26-30, supported by paid-user growth, deeper category expansion and AI-led monetization.

PhysicsWallah's pre-Indian accounting standard (pre-IND AS) EBITDA margins could improve from 26% in FY26 to 30% by FY28, driven by operating leverage and customer acquisition efficiencies, the brokerage projected.

Motilal Oswal said the company's offline business provides a higher average revenue per user (ARPU) monetisation layer rather than the primary value driver. It expects the offline revenue grow at a 20% CAGR over FY26-30, with improvement in profitability, as recently opened centers mature and utilisation increases.

It said execution remains the key monitorable, even as Physicswallah has built one of India's fastest growing offline coaching networks in 353 centers.



Bull Case

In a bull case scenario, Motilal Oswal's target price is ₹220 per share, indicating an 82% upside.

In this case, online revenue will likely clock a 22% CAGR over FY26-37, driven by continued market share gains in a highly underpenetrated market. Physicswallah serves 4.87 million students, compared with a significantly larger competitive exam candidate pool.

Online growth is likely to be driven by both volume and pricing, with unique transacting users reporting 14% CAGR and average cost per user (ACPU) clocking 7% CAGR over FY26-37, the brokerage said.

The pre-IND AS EBITDA would likely register a 29.3% CAGR over FY26-37, driven by operating leverage and sustained improvement in customer acquisition efficiency. The offline revenue will post a 17.5% CAGR over FY26-37, supported by higher center utilization and continued network expansion.

PhysicsWallah's Pre-IND AS EBITDA margin would expand by 3,563 basis points over FY26-37 as revenue growth increasingly flows through to profitability, the brokerage said.

In the bull case scenario, Motilal Oswal's target price values the stock at 55 times its estimated financial year 2028 enterprise value to EBITDA multiple for the online business and 18 times for the offline business.

Bear case

In a bear case scenario, Motilal Oswal has a target price of ₹110 per share, implying a 9% downside.

It said in this scenario, the online revenue would clock a 16.7% CAGR over FY26-37, tempered by competition from digital-first EdTech players, offline institutes, and AI-led personalized learning.

It said the pre-IND AS EBITDA would likely post an 18.8% CAGR over FY26-37, with slower revenue growth limiting operating leverage, in a bear case scenario.

The offline revenue would likely record a 15.7% CAGR over FY26-37, with centre utilization and faculty availability acting as key constraints.

The pre-IND AS EBITDA margin expansion would be limited to ₹1,513 basis points over FY26-37, it added.

Key risks

• Higher competitive intensity.


• Weaker offline execution and centre utilization.


• Higher faculty attrition impacting student outcomes and brand perception.


• Adverse regulatory changes affecting coaching institutes, advertising or data privacy.

Stock reaction

A total of eight analysts have coverage on the Physicswallah stock. Of them, seven have a "buy" recommendation while one has a "hold" rating.

Shares of PhysicsWallah are now trading 5% higher on Friday at ₹126.7. The stock trades above its issue price of ₹108, and has trimmed its year-to-date losses down to 4.5% after today's upmove. The stock though, is still down 12.2% from its listing price of ₹145 apiece.

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