Physics Wallah melts

1st January 2024 New Delhi Continuing its winning streak for the third consecutive year and scoring a hattrick of profitability, Physics Wallah (PW) reported a total revenue of INR 798 crore, up 3.4 times from the previous year. Total student enrolment touching 24 lakhs for the financial year 2023. Physics Wallah has successfully cracked the code of customer acquisition costs (CaCs). PW solved for the community first and then went after growth, capital, and integration across the value chain thereby building a sustainable business.

The company’s revenue surged 3.4 times in FY23 from the previous fiscal year driven by increased penetration within the offline category.

PW’s revenue from operations increased to INR 771.76 crore during the fiscal year ending March 2023, compared to INR 232.47 crore during the previous fiscal year and INR 24.6 crore in FY21. PW will soon file financial statements with the Registrar of Companies. The platform taught close to 24 lakh students across all exam categories (excluding acquisitions) up from more than 9 lakh students last year. The company saw a major growth in student numbers coming from expansion in multiple new exam categories, skilling, and an impressive surge in offline student enrolments. PW had raised USD 100 million during the financial year 2023 and took a lead in consolidating the space through its M&A spree and entered into as much as 8 partnerships in FY23, all profitable in themselves. The inorganic revenue of the order of INR 500 crore shall reflect in the FY24 financials through these M&A made in FY23.

Contrary to the majority other stories in the startup ecosystem, PW reported an adjusted EBITDA (earnings before income, tax, depreciation and amortization) of INR 127 crore in FY23 (adjusted for ESOP costs, LER and one-time inventory provisioning), which stood at INR 134 crore in FY22.

PW’s performance provides a much-needed warmth in an otherwise chilly winter in the Edtech industry.

PW’s Co-founder Prateek Maheshwari said, “Our growth was significant both in the online and offline space. Our online categories grew to 2.5x in terms of students headcount from 9 lakh in FY22 to 23.5 lakh in FY23 while our offline student headcount grew to 5.5x touching 60,000 enrolments in FY23. We also continued to cement our position in the NEET/JEE space while establishing ourselves as the topmost player in other categories like UPSC, Commerce, Gate, Government One-day exam, and Skills. We will keep investing in more categories – across study abroad, PG test prep, skills, foundation – applying a similar formula of community, quality, and affordability, to remain in a hyper-growth phase. We are in no hurry to compromise growth for achieving a steady-state margin profile.”

PW’s cash reserves also improved significantly to almost INR 750 crore as of 31st March 2023.

PW’s total expenses grew to INR 777 crore in FY23 (including non-cash Expenses i.e ESOP, LER & Inventory provisions) from INR 103 crore a year earlier. The employee costs grew to INR 406 crore (Including ESOP benefits, which was nil in FY22) from INR 42 crore last year. However, the marketing costs remained as a single-digit percentage of revenue highlighting a strong moat of community for the company in acquiring new students.

Physics Wallah (PW), the only Edtech player that has thrived in the online space has also very effectively pivoted in offline and hybrid space by establishing Vidyapeeth and Pathshala centers across India. Physics Wallah is looking to expand to 120+ centers through its Vidyapeeth(Offline) and Pathshala(Hybrid) centers in the coming year, from 58 centers currently operational, and will teach 2.5 Lakh students by 2024-25 academic year, up from 1.4 Lakh in the academic year 2023-24.

PW’s Founder and CEO Alakh Pandey stated: “Our commitment is clear: We’re investing to reshape India’s education. Education uplifts societies and drives economic growth. We will continue to plough back all the free cash flows generated by the business back into it to serve more students – touch more lives – transform more families.”

Over the past 3+ years, since incorporation, the PW model has consistently proven that if you honestly focus on educating and uplifting the students of BHARAT – growth, revenue, and profitability will follow.