PhysicsWallah shares can rally 32% from current levels, DAM Capital says with 'buy' rating

DAM Capital initiated coverage on PhysicsWallah Ltd. on Tuesday, June 9, giving it a 'Buy' rating and a target price of ₹140 per share.

The target implies a potential upside of nearly 32% from the base price of ₹105.

DAM Capital described PhysicsWallah as India's largest full-stack education platform, highlighting its freemium, content-first business model as a key differentiator in the country's competitive edtech market.

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The brokerage said the company has built a subscriber acquisition engine of 142 million users through its free-content ecosystem, enabling it to maintain one of the industry's lowest customer acquisition costs.

According to DAM Capital, advertising expenditure accounts for only around 9% of revenue, significantly lower than most peers, allowing PhysicsWallah to expand into newer categories such as Civil Services, Chartered Accountancy and State Boards with minimal incremental acquisition costs.

DAM Capital believes the company's online business remains the primary growth driver and expects it to benefit from category expansion, scale advantages and operating leverage. The brokerage forecasts PhysicsWallah's revenue and EBITDA to grow at a compound annual rate of 24% and 71%, respectively, between FY26 and FY28.

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The brokerage also highlighted the company's growing offline presence through its Vidyapeeth centres. While the offline business remains in an investment phase, DAM Capital expects profitability to improve as centre cohorts mature and utilisation levels increase over time. It noted that more than half of the Vidyapeeth centres are already profitable, providing confidence in the segment's long-term operating leverage.

DAM Capital further said PhysicsWallah's negative working capital model, where fees are collected upfront while costs are incurred over the academic year, supports strong cash generation and provides flexibility to fund future expansion.

PhysicsWallah has seven analysts tracking the stock, of which six have a "buy" recommendation and one has a "hold" rating on the stock. The consensus price target of ₹131.57 implies an upside potential of 24% from Tuesday's close.

PhysicsWallah shares recently saw a rebound from lower levels after it reversed its earlier decision to pursue student lending through its subsidiary. Instead, it has tied up with multiple, regulated third-party NBFCs to facilitate the same.

Shares of the company were trading flat at ₹106.27 on Wednesday. The stock has fallen nearly 20% so far this year and more than 31% over the last 12 months and are trading close to their IPO price of ₹106 per share.