PhysicsWallah Shares Surge Amid JPMorgan's Positive Outlook Shares of PhysicsWallah Ltd. experienced a significant rise, climbing as much as 5% on Tuesday, April 21, following the initiation of coverage by JPMorgan. The brokerage firm assigned an "Overweight" rating to the stock, accompanied by a price target of ₹125, which represents an estimated 18% upside from current market levels. This analysis positioned PhysicsWallah as a key player in India's edtech sector, highlighting its disruptive role in the online test preparation industry through a low-cost content delivery model that spans both digital and hybrid formats. JPMorgan emphasized the company's strong market position, noting its ability to capitalize on the expanding online education sector. The brokerage cited projections from Redseer, which forecast a compound annual growth rate (CAGR) of 29% for the online market between fiscal years 2025 and 2030, with the sector expected to reach a value of $6 to $6.5 billion. The firm also highlighted the company's potential for strong margins, estimating that its online segment could achieve around 30% profitability by fiscal year 2027. While the online business is a primary driver of the company's profitability and cash flow generation, JPMorgan acknowledged the importance of its offline operations. The company has established a growing presence through over 300 centers across 200 cities, catering to students who prefer classroom-based learning. This dual approach—combining digital and physical infrastructure—provides the company with additional growth opportunities. However, the brokerage identified several risks that could impact PhysicsWallah's performance.#jpmorgan #jee #neet #physicswallah #redseer
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
