PhysicsWallah’s Q3 top and bottom line climb 33%

Edtech firm PhysicsWallah (PW) on Thursday reported about 33% year-on-year growth in both its top and bottom lines. It posted operating revenue of Rs 1,082.4 crore in Q3 FY26 and a profit after tax of Rs 102.3 crore, driven by an expanding paid user base and strong operating margins.

The paid user base of the Alakh Pandey-led firm expanded to 4.37 million in the nine months to date, with online transacting users at 3.96 million and offline enrolments at 0.41 million.

The quarter also benefited from operating leverage as EBITDA (earnings before interest, taxes, depreciation, and amortisation) climbed to Rs 351.2 crore, yielding a roughly 32% margin, which helped lift the company into profit. EBITDA is a measure of a company’s profitability of the operating business.

PW’s revenue from operations for the first nine months of FY26 stood at Rs 2,980.7 crore, about a 31% year-on-year increase, while adjusted EBITDA for the period reached Rs 647.4 crore, a nearly 22% margin. 

Operating cash flow for the nine months was Rs 642.9 crore, up from the previous full year, reflecting stronger cash generation as the business scaled. The company holds a large treasury balance of approximately Rs 5,054.4 crore, which includes net IPO proceeds of Rs 2,961.8 crore that remain largely unutilised and available for planned expansion.  

Management flagged several non-recurring or exceptional items. Standalone IPO-related expenses were about Rs 8.3 crore, and the impact of new labour codes resulted in a one-off charge of roughly Rs 13 crore on a standalone basis and Rs 15.3 crore on a consolidated basis. The new Indian Labour Codes consolidated various labour laws and led to an increase in liabilities for gratuity and leave encashment due to a revised definition of wages.

Strategic expansion has continued through the group’s subsidiary network, which now consists of 13 entities and one associate. During this period, the holding company agreed to acquire a 40% stake in Guiding Light Education Technologies, known as Sarrthi, for Rs 95 crore. Furthermore, the company invested Rs 414.6 crore into its subsidiary Penpencil Edu Services to support the expansion of school management services and technology implementation. A smaller acquisition of Kay Lifestyle was disclosed at about Rs 2 crore.

Total consolidated expenses for the quarter rose to Rs 979.87 crore, compared to Rs 738.31 crore a year earlier. The primary driver of this 32.7% increase was employee benefit expenses, which reached Rs 489.74 crore. Marketing and publicity efforts also required substantial funding, with expenditure in this area reaching Rs 63.61 crore for the quarter.