JPMorgan initiates coverage with 'Buy' on Physicswallah; stock gains 4% JPMorgan has initiated coverage on PhysicsWallah with an 'Overweight' rating and a price target of ₹125, which represents a 14% upside from its current market price of ₹110. At 11:44 AM, the company's shares were trading 2.7% higher at ₹109.98, outperforming the BSE Sensex, which rose 0.77% to 79,122.61. The stock reached a day's high of ₹111.2, reflecting investor optimism. The brokerage's valuation of the edtech firm relies on a sum-of-the-parts (SOTP) approach, assigning a 30x EV/Ebitda multiple to its core online and hybrid test prep business and a lower 10x EV/Ebitda to its offline centres. The school business segment is not valued in this analysis. JPMorgan's positive outlook is anchored in the growth potential of India's test prep market, which is projected to expand at a 13% compound annual growth rate (CAGR) over FY25-30, reaching $23-25 billion, according to Redseer. Within this, the online segment is expected to grow at a faster pace of 29% CAGR, reaching $6-6.5 billion. PhysicsWallah is positioned to capture a significant share of this market, particularly with its affordable pricing strategy for JEE, NEET, and UPSC preparation. The brokerage highlights the company's ability to cater to a broad student base across income brackets through its range of courses, from basic to premium tiers. The brokerage emphasizes its confidence in PhysicsWallah's online business, which is forecasted to grow at 30% over FY26-28. Margins are expected to rise from 30% to 33%, driven by increased course penetration, student acquisition, and higher revenue from premium offerings. However, the offline centres business, currently loss-making, is anticipated to break even by FY27 as utilization improves.#bse_sensex #jpmorgan #physicswallah #redseer #k_12_schools
