Physics Wallah Navigates South India Expansion After IPO, Faces Kozhikode Revenue Dip

Physics Wallah (PW) recently launched its ₹3,480 crore Initial Public Offering (IPO), facing a mixed investor response. The edtech firm, strong in North India, is now pushing into the South. However, its Kozhikode, Kerala operations, acquired via Xylem Learning, have seen a significant setback. In Q1 FY26, Kozhikode's offline revenue dropped nearly 30% to ₹24 crore, falling from its previous top position. PW attributes this to scaling back hostel operations for "strategic reasons."

The South Indian test-prep market operates differently from the North, with a strong emphasis on integrated school-coaching models and full-day supervision, unlike PW's more flexible North Indian playbook. Major competitors like Sri Chaitanya and Narayana Group dominate this structured system. PW plans to expand its Xylem-branded centres in the South, using IPO funds, but founder Prateek Maheshwari insists on sticking to the company's core strategy of prioritizing online penetration before offline expansion.

Despite a vast student base, PW's performance in top competitive exams like JEE and NEET is seen as modest compared to rivals who boast more top ranks. Furthermore, PW's online paid penetration in Southern states is notably low. The company's success hinges on adapting its North-tested model to the South's distinct ecosystem and demonstrating tangible student outcomes.

Impact:

This news significantly impacts Physics Wallah's post-IPO valuation and investor confidence. Its ability to adapt to South India's unique educational landscape will determine its national growth trajectory. The Indian edtech sector may also face strategic realignments based on PW's success or failure in this crucial expansion phase.

Impact Rating: 7/10

Difficult Terms Explained:

Edtech: Educational technology, using technology to deliver educational services.

IPO (Initial Public Offering): The process by which a private company first sells shares to the public.

Offline Revenue Driver: A location generating significant revenue through physical operations.

Strategic Reasons: Company's long-term strategic planning considerations.

Test-prep: Coaching for competitive entrance examinations.

Integrated School-Coaching Model: A system merging school academics and competitive exam coaching on one campus.

Dummy School System: Students enrolled in school but focusing solely on coaching classes.

Vidyapeeth/Pathshala Hubs: Physics Wallah's physical learning centres.

JEE (Joint Entrance Examination): Entrance exam for engineering admissions.

NEET (National Eligibility cum Entrance Test): Entrance exam for medical admissions.

Bootstrapped: Funded by founders or initial revenue without external investment.

Marquee Investors: High-profile investors.

Inorganic Investments: Growth through acquisitions or mergers.