PhysicsWallah's Revenue Soars To Rs 2,000 Cr, But Losses Balloon Amid Expansion Plans

PhysicsWallah, the rapidly growing edtech unicorn based in Noida, has achieved a major revenue milestone, crossing the Rs 2,000-crore mark in the financial year ending 31 March 2024. The company’s operating revenue surged by 160 per cent, reaching Rs 1,940 crore, up from Rs 744 crore in the previous fiscal year. 

Despite this growth, the edtech firm’s financial performance was marred by a significant increase in losses, with its consolidated net loss ballooning nearly 13.5 times to Rs 1,131 crore from Rs 84 crore in FY23.

The surge in losses is attributed to a combination of higher employee costs and a sharp rise in miscellaneous expenses. PhysicsWallah’s miscellaneous expenses, which jumped to Rs 1,453 crore from Rs 170 crore, include non-cash costs related to the revaluation of preference shares, which led to a one-time expense of Rs 756 crore. As a result, the company revised its previous financial results, restating a net loss of Rs 84 crore for FY23, a departure from the Rs 16 crore profit it had initially reported.

Total expenses for the year escalated to Rs 3,279 crore, up from Rs 862 crore in the previous year. A large portion of these costs, Rs 1,158 crore, was spent on employee benefits, while the remaining Rs 1,659 crore was directed towards other operational expenses. Notably, the company made strategic cuts in its advertising and promotional spend, slashing the budget by 70 per cent, bringing it down to Rs 19 crore from Rs 67 crore in FY23.

PhysicsWallah, known for its focus on competitive exam preparation, generates the majority of its revenue from educational services, including coaching classes, hostel facilities, and the sale of study materials, tablets, and related products. The company’s growth has positioned it as a formidable player in the edtech space, competing with industry giants like Byju’s-owned Aakash Institute, Allen Career Institute, and Unacademy.

Despite the challenges posed by its widening losses, the company continues to scale, having raised USD 210 million in a funding round in September 2023, valuing the company at USD 2.8 billion. This follows a USD 100 million round in 2022 at a valuation of USD 1.1 billion. Part of the company’s future strategy involves expanding its offline operations, with plans to open 75 new centres across cities. While offline centres generally take about three years to become profitable, PhysicsWallah remains optimistic, expecting these centres to contribute significantly to its long-term growth.