PhysicsWallah's loss declines nearly 80% to Rs 243 crore in FY25; pays Rs 1,426 crore in salaries

PhysicsWallah, one of India’s fastest-growing edtech companies, recently filed an updated draft red herring prospectus (DRHP) with SEBI for a Rs 3,820 crore IPO as it narrowed losses and nearly matched its online revenues with its expanding network of offline coaching centers.

Advertisment

The Noida-based unicorn reported operating revenue of Rs 2,886.6 crore in the fiscal year ended March 2025 (FY25), a 49% increase from Rs 1,940.7 crore a year earlier, according to its updated draft red herring prospectus. 

Including other income, total income rose to Rs 3,039.1 crore. Net losses shrank to Rs 243.3 crore from Rs 1,131.0 crore, largely because the company avoided a one-time hit it had booked the previous year on the revaluation of preference shares.

Coaching services remained the backbone of the business, contributing more than Rs 2,498 crore. Ancillary services such as hostels and transport added another Rs 116 crore, while the sale of books and student merchandise contributed Rs 259 crore. Advertising and other income accounted for just under Rs 13 crore.

Both digital and physical formats grew at nearly identical rates. Online courses generated Rs 1,404 crore in revenue, up 45%, while offline centers brought in Rs 1,352 crore, up 46%. As of March 2025, PhysicsWallah operated 198 centers across 109 cities, up from 126 a year earlier. Average revenue per offline user stood at Rs 40,405, underscoring the premium students are willing to pay for classroom instruction.

The company’s operating structure remains cost heavy. Total expenses in FY25 reached Rs 3,265 crore, or 113% of revenue. Employee benefits alone consumed Rs 1,401 crore, reflecting a workforce of nearly 15,800.

Direct costs such as faculty contracts, server fees, and franchise payouts amounted to Rs 513 crore. Marketing outlays rose 41% to Rs 276 crore, about a tenth of operating revenue. Depreciation and amortization climbed to Rs 366 crore, driven by leasehold improvements, acquisitions, and technology spend.

Still, PhysicsWallah managed to turn EBITDA positive, posting Rs 193 crore versus a loss of Rs 829 crore the year before. Its EBITDA margin improved to 6.7% from –42.7%.

The company’s updated prospectus outlines a Rs 3,100 crore fresh issue and a Rs 720 crore offer-for-sale by founders Alakh Pandey and Prateek Boob. Institutional backers, including WestBridge Capital, Hornbill Capital, GSV Ventures and Lightspeed, are not selling shares in the IPO.

About Rs 1,000 crore of the proceeds are earmarked for offline expansion, with half dedicated to new centers and the rest to lease payments for existing facilities. Another Rs 710 crore is planned for marketing and Rs 200 crore for technology.

Founded as a YouTube channel in 2016 by Pandey, PhysicsWallah has grown into a platform spanning 13 education categories, including undergraduate test prep, civil services, and accountancy. By March 2025, its paid user base had reached 4.46 million, while total student enrollments rose 21% year-on-year to 48 lakh.

The company’s overseas revenue remains marginal at Rs 35.5 crore, though it grew 61% from the prior year. PhysicsWallah also disclosed political donations of Rs 37 lakh in FY25, including nearly Rs 29 lakh to the Communist Party of India.