Analysts Weigh In as PhysicsWallah Shares Fall for the Third Straight Session

PhysicsWallah Shares Slide for Third Day: Analysts Weigh In on Whether Investors Should Go Long

PhysicsWallah shares continued to remain under pressure on November 21, extending their losing streak for the third consecutive session. After a strong market debut earlier this week, the newly listed edtech stock has shifted into consolidation mode, leading to heightened investor caution and volatile intraday movements. Market participants, especially retail investors, are now seeking clarity on whether this correction offers a buying opportunity or signals deeper risks ahead.

During the early hours of Thursday’s trade, PhysicsWallah share price spiked over 5 percent to touch Rs 149.59, only to erase all its gains and slip more than 1 percent lower, trading at Rs 140.21 around 12:24 pm. The session saw sharp swings as traders reacted to valuation concerns, post-listing profit-booking, and sector-wide uncertainties. Despite the volatility, the company still commands a substantial market capitalization of Rs 40,490 crore.

Market Cap Erosion Highlights Investor Concerns

The recent selloff has been particularly steep. Just a day earlier, PhysicsWallah’s market capitalization fell below the Rs 35,000-crore mark, signaling a rapid erosion of nearly Rs 12,000 crore in only three sessions. This is in stark contrast to its strong debut, where the stock peaked at a valuation of Rs 46,300 crore, buoyed by strong retail enthusiasm and expectations of robust long-term growth.

A Strong Debut Followed by Rapid Cooling-Off

PhysicsWallah shares listed on November 18 with an impressive 33 percent premium over the IPO price at Rs 145 per share. The momentum carried through the debut day, with the stock closing at Rs 156.49, reflecting a nearly 44 percent jump from the issue price. However, such swift gains also triggered profit-booking as investors sought to lock in early listing profits, leading to the subsequent correction.

Also Read : Capillary Technologies Shares Surge 13% After Listing at 3% Discount on BSE

Should You Buy, Sell or Hold PhysicsWallah Shares? Here’s What Analysts Say

As volatility grips the counter, analysts believe that caution—not aggression—should guide investor strategy.

Profit Booking and Stop-Loss Recommended

Shivani Nyati, Head of Wealth at Swastika Investmart, noted that while the company’s brand strength and user base offer long-term potential, risks remain on the competitive and regulatory fronts. She highlighted challenges such as stiff competition from established edtech and offline coaching players, uncertainties around education-sector policies, and difficulty sustaining profitability while expanding rapidly.

Nyati advised investors who received allotments during the IPO to book partial profits and hold the remaining position with a stop-loss at Rs 130.

Valuation Risks Call for Patience

Siddharth Maurya, Founder and Managing Director at Vibhavangal Anukulakara, echoed the need for restraint. According to him, PhysicsWallah’s biggest near-term task is transitioning millions of free learners into paying subscribers while optimizing costs.

“If PhysicsWallah can balance regional expansion with a hybrid teaching model and maintain margins, it will secure long-term credibility,” he said. He added that the stock is likely to trade sideways as the market reassesses expectations.

Maurya stressed that new investors should wait for earnings visibility and valuation comfort before considering long positions.

Competition and Execution Challenges Loom Large

Shravan Shetty, Managing Director at Primus Partners, believes the company’s scale offers value but highlighted headwinds. He pointed to competition from Unacademy, Byju’s and other offline-hybrid players, along with the pressure to deliver sustainable growth at stretched valuations.

He added that retaining top teaching talent and maintaining quality as the business expands will determine long-term returns.

High Valuations and Rising Costs Raise Red Flags

Research Analyst Abhinav Tiwari of Bonanza emphasized that the company remains loss-making, despite achieving EBITDA profitability in FY25. With the stock trading at 10.8x Price-to-Sales, valuation concerns remain substantial.

Tiwari highlighted heavy dependence on founder Alakh Pandey, high rental obligations from 303 offline centers, and rising expenses in a sector still recovering from the Byju’s fallout.

His colleague, Khushi Mistry, added that the latest correction is a healthy reset, shifting market focus back toward fundamentals like margin expansion and sustainable growth.

About PhysicsWallah: From YouTube Classroom to Edtech Giant

Founded as a YouTube channel in 2016, PhysicsWallah has grown into one of India’s largest edtech companies with a strong online presence complemented by an expanding network of offline learning centers. The firm recorded 49 percent revenue growth in FY25, while reducing losses to Rs 243 crore from Rs 1,131 crore a year earlier.

PhysicsWallah’s valuation now stands higher than several unlisted peers, including upGrad (valued at $2.25 billion) and Unacademy (valued at $3.44 billion), underscoring the market’s long-term confidence in the brand’s reach and potential.

Outlook: A Phase of Consolidation Before Clarity

As PhysicsWallah shares continue to decline for the third day, analysts broadly agree that the stock is undergoing a natural cooling-off phase after an exuberant debut. For existing investors, maintaining a disciplined stop-loss strategy is essential. For new investors, waiting for stability and concrete earnings performance may be the safer path.

With high growth expectations, evolving regulations, and stiff competition shaping the road ahead, the next few quarters will be crucial in determining whether PhysicsWallah can convert scale into sustainable profitability.

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