Physicswallah Ltd

Resigning director

• Sandeep Singhal, Non-Executive Nominee Director, resigns from PhysicsWallah Limited, effective Aug 19, 2026.
• Reason: other professional and personal commitments.
• There are no other material reasons stated for resignation.
• Resigns from the Board as Non-Executive Nominee Director.
• Immediate effect cited in the resignation letter.
• Annexure-A attached detailing reason and effective date.

Financial Performance

• Q1 FY27 revenue from operations: INR 1,054 crores, up 24% YoY
• Online revenue grew 33% YoY; offline and others grew 16%
• Pre-Ind AS EBITDA negative INR 44 crores (4% of revenue)
• EBITDA INR 52 crores; vs -INR 21 crores last year
• PBT negative INR 84 crores vs INR 152 crores prior-year; 995 bps improvement
• One-time non-cash charge on Saarthi IAS stake

Operating Update

• First-time segment-level reporting: online and offline revenues and EBITDA reported separately
• NEET pattern change impacted collections and enrollments; ~50% growth post July 16 results
• K-12 online enrollments up 40-41% to 0.78 million; revenue up 88% to INR 105 crores
• PW Books app launched; Earners skilling; Pi OTT; PW Talk enrollments 130k; Pi 40k
• Ask AI doubt-solving engine; beta AI tutor; rollout next quarter
• Online margins near 27% in FY26; vernacular/Curious Junior nearing profitability; NEET PG investments

Balance Sheet and Cash Flow

• Cash/treasury: INR 5,600 crores as of 30-Jun; IPO proceeds included INR 2,000 crores
• Negative working capital cycle; upfront fees drive cash build
• Pathshala centers converted to Vidyapeeth; 84 in March; 70 now; zero closed
• New offline centers planned over next 2 quarters; expansion opportunistic

Projects and Capex

• PW Books app: 2.2 million downloads; Play Store rating 4.7
• Earners category: short-term digital skilling courses; AI-led initiatives
• Talk enrollments: 130k; Pi enrollments: 40k
• AI initiatives: Ask AI; AI tutor beta; rollout planned this financial year

Outlook and Guidance

• Annual guidance reaffirmed: 30% revenue improvement; 100% EBITDA improvement
• Offline margins 13%–15% for 23–24 centers; near profitability this year
• Online margins to improve; vernacular and Curious Junior moving toward profitability

Q&A Highlights

• NEET cycle impact: offline revenue could have grown 22–25%; online NEET enrollments +1–1.5 lakh
• Guidance reaffirmed: 30% revenue growth and 100% EBITDA growth maintained
• Margins: online margins ~27% in FY26; offline ARPU up 7%; hybrid offline class concept explored
• Pathshala conversions: zero centers closed; all Pathshala converted to Vidyapeeth
• 63 offline centers added; margin levers include mixed delivery to boost capacity utilization

Risks and Watchpoints

• NEET/ govt exam cycle variability; revenue and enrollments sensitive to cadence
• Offline expansion depends on center economics and demand; execution risk in new categories

Issue Overview

• Type of issue: IPO; securities: equity shares.
• Total issue size disclosed; no revision or undersubscription noted.
• Main objectives: capex for offline/hybrid centers, lease payments, investments in subsidiaries, marketing, servers, and GCP.

Utilisation of Proceeds

• Utilisation is as per disclosures in the offer document.
• No material deviation or shareholder approvals for deviations.
• Capex fit-outs: utilised 14.28 this quarter; end-quarter balance 34.05; unutilised 426.50.
• Lease payments: utilised 44.42 this quarter; end balance 100.81; unutilised 447.50.
• Investment in Xylem: utilised 2.95; unutilised 44.22.
• Investment in Utkarsh: utilised 1.92; end balance 26.08.
• Server and cloud costs: utilised 22.59; end 37.71; unutilised 162.39.
• Marketing: utilised 43.25; end 66.59; unutilised 643.41.
• Acquisition in Utkarsh stake: utilised 26.47; end 26.50; unutilised 0.00.
• General corporate purposes: 127.76 utilised; end 674.47; unutilised 266.67.
• Total un utilised funds: 2,041.06 crore; majority invested in fixed deposits; some idle funds.
• GCP allocations include employee benefits, GST, lease expenses, and a Rs 1.04 crore misclassification to GCP without board approval.

Governance and Compliance

• Approvals: All required government/statutory approvals obtained for objects.
• Material events: income tax demand; reduced on rectification; appeal pending; stay deposited.
• MA disclosures: limited assurance; no audit; relies on management/certifications.
• Notes flag: tax dispute details and allocation notes provided; no material deviation reported.

General Corporate Purpose (GCP)

• GCP total utilisation: 127.76 crore.
• Sub-heads include employee benefits, GST, leases, and capital expenditure.
• One Rs. 1.04 crore reclassified to GCP without board approval.
• Board approval for GCP allocations generally obtained; exception noted for misclassified item.

Target and business

• Target: Bharat Innovations Global Private Limited (BIGPL), education-focused company in India.
• BIGPL provides education collaboration with government bodies and educational institutions across India.
• Incorporated November 26, 2024; private limited company.

Deal structure and consideration

• Acquisition of 10% equity shares; PWL stake rises from 90% to 100%.
• No consideration payable; cancellation terms under Shareholders' Agreement.
• NSDC International Limited is an existing BIGPL shareholder; not related party.
• Promoter group has no additional BIGPL interest beyond PWL holdings.

Regulatory and timeline

• Regulatory approvals: Not applicable.
• Completion within six months from board approval (Aug 14, 2026).

Target financials

• Paid-up capital: INR 1,00,000.
• Turnover: FY23-24 not disclosed; FY24-25 ₹0.00 crore; FY25-26 ₹0.16 crore.
• Net worth: negative ₹66.90 lakh.

Target background

• Turnover history shows small scale; FY25-26 ₹0.16 crore.
• Presence across India; collaborates with government bodies.

Appointment of NED

• Type of change: Appointment of Anoop Kumar Mittal as Additional Director, Non-Executive Independent Director.
• Effective date: August 14, 2026; term: five consecutive years, subject to shareholder approval.
• Profile: Civil Engineering graduate; former CMD of NBCC (2013-2019); extensive infra, real estate, M&A experience.
• Relationship: Not related to any director of the company.
• Reason: Recommended by the Nomination and Remuneration Committee.

Secretarial Auditor Appointment

• Appointment of Naresh Verma & Associates as Secretarial Auditor for five years.
• Term from conclusion of 6th AGM to conclusion of 11th AGM, Apr 1, 2026–Mar 31, 2031.
• Subject to shareholders' approval at the ensuing AGM.
• Brief profile: NVA established in 2001, peer-reviewed secretarial and advisory services provider.
• CS Naresh Verma, sole proprietor, fellow ICSI, law graduate, 25+ years' experience.
• Firm registration number S2002DE050200.
• Disclosures: no relationships with directors.

Q1 FY27 highlights

• Q1 FY27 revenue rose 24% YoY to ₹1,054 Cr; Online ₹549 Cr, Offline ₹490 Cr.
• EBITDA positive ₹52 Cr with 4.9% margin; YoY improvement 743 bps.
• PAT margin -8.4%; PAT ₹-88 Cr; YoY improvement 663 bps.
• Pre-IndAS EBITDA -₹44 Cr; margin -4.2%; improved 627 bps YoY.
• Total income ₹1,163 Cr; other income ₹109 Cr.
• Treasury balance ₹5,601 Cr as of 30 Jun 2026 (incl IPO proceeds).
• NEET calendar shift reduced online collections 28% in Q1; post-result growth 51% YoY.
• Exiting lending; term sheet with RBI partner to transfer loan portfolio within 3 months.
• Online K-12 growth: enrolments up 41% YoY; online revenue ₹56 Cr to ₹105 Cr.
• PW Books launched 11 July 2026; 23k paid orders in 10 days; 2.2M downloads; DAU 4.03M; MAU 35M.