Physicswallah Ltd Management Discussions

Economic Review

Indian Economy

Indias economy exhibited strong resilience in FY2025-26, supported by robust domestic demand, stable macroeconomic fundamentals and continued policy support. Real GDP growth is estimated at 7.7%, among the fastest of any major global economy 1

Economic expansion during the year was driven primarily by domestic consumption and investment. Private Final Consumption Expenditure, accounting for 61.5% of GDP, remained a key growth engine, reflecting the strength of Indias consumption-led economic structure.

The rapid expansion of digital infrastructure, increasing internet access and growth in digital transactions are improving accessibility to education across geographies, expanding the addressable market for technology-enabled learning and supporting wider adoption of online and hybrid models across Tier 2 and beyond markets. For Physicswallah, these structural trends strengthen opportunities to scale its learner base, deepen engagement and expand access to affordable, high-quality education.

These structural drivers are expected to remain supportive for the Education Sector over the medium term. Rising household spending on education, increasing digital adoption and continued demand for outcome-oriented learning are likely to create opportunities across test preparation, upskilling and professional learning, and school education segments. Platforms with scalable digital capabilities, strong brand recognition and integrated hybrid delivery models are well positioned to benefit from these long-term trends.

Industry Overview

Indian Education Market 2

Indias education sector represents one of the largest and most structurally significant segments of the economy. Growth is driven by a sizeable and growing population, rising aspirations for quality education and increasing adoption of technology-enabled learning. The sector spans a wide spectrum, including test preparation, upskilling and professional learning, school education and higher education, each addressing distinct learner needs across age groups and career stages. Population less than 25 years contributes to ~44% of Indias population in CY2024. Out of them, ~54% are in school going age of 5-18 years and ~28% are in the college and university going age of 19-25 years. Additionally, there are those who pursue further education post higher education, be it professional courses or upskilling beyond the age of 25 years.

The Indian education market has expanded steadily and is expected to maintain this growth trajectory over the medium to long term. Industry estimates indicate that the sector could reach approximately US$300+ billion by FY30, supported by favorable demographics, rising household incomes and increasing prioritization of education as a means of socioeconomic advancement.

Segmentation of Indias Education Market

Fiscal 2022, Fiscal 2024-25, Fiscal 2030P, in I trillions (US$ billions), in %

The market remains fragmented and largely unorganised, particularly in supplementary education, a structural opportunity for organized, technology-led players to gain share, including in Tier 2/3 cities.

Education expenditure continues to exhibit relatively inelastic characteristics, with households allocating a meaningful share of income towards academic achievement and career progression.

Shift Towards Online and Digital Learning

Indias education sector is undergoing a structural shift towards digital and technology-enabled learning, supported by rising internet penetration, widespread smartphone adoption and increasing familiarity with online platforms. As of CY2024, India had an estimated 810–840 million internet learners, projected to grow to 1,018-1,190 million by CY2030.

Smartphone adoption has been a key enabler of this shift. The user base stood at approximately 680-690 million in CY2024 and is expected to increase to 1,000-1,125 million by CY2030. Data costs remain among the lowest globally at around I13 per GB, significantly improving accessibility to digital content across income segments and geographies.

The expansion of digital infrastructure has broadened the base of online consumers, with 430-450 million learners transacting digitally in CY2024, expected to nearly double to 948–1,094 million by CY2030. This reflects growing trust in digital platforms and a wider shift towards online consumption, including education.

Online penetration in education was just ~4% in FY25 - the lowest among major consumption categories (vs. 7-35%% for retail, food services and travel), underscoring significant headroom for online and hybrid models to gain share.

India Overall Consumption Market and Online Penetration – Overall vs key sectors

Fiscal 2025, In I trillions (US$ trillions), in %

Growth Drivers

Favourable Demographics

Rising Aspirations and Income Levels

Structural Gaps Creating Opportunities

Digital Reach

Policy Support and Reforms

Key Segments of the Indian Education Market
Fiscal 2025, in INR trillions (US$ billions), in % Indian Education Market 15-16 trillion (US$ 185-195 billion)
Pre-K	K-12	Higher Education	Test Preparation	Upskilling
INR 0.45-0.55 trillion (US$ 5.5- 6.5 billion) 3%	INR 7.7-8.7 trillion (US$ 95- 105 billion) 52%	INR 5.5-6 trillion (US$ 66- 72 billion) -36%	INR 1-1.1 trillion (US$ 12.5- 13.5 billion) 7%	INR 0.21-0.25 trillion (US$ 2.5-3 billion) -2%
Pre Primary	Elementary (Std. 1-8)	Undergraduate	UG Entrance (NEET, JEE, Defense, CUET)	Management
	Secondary (Std. 9-10)	Postgraduate	Government Exams (UPSC, State PSC, Others)	Technology
	Higher Secondary (Std. 11-12)		Professional Exams (CA, CS, CFA)	Healthcare
			PG Entrance (CAT, GRE, GATE, NEET, CUET, GMAT)	Others

CAGR FY2025-2030P
8%	8%	10%	13%	27%

Growth Drivers
a. NEP 2020 formalizes ECCE (3 yrs Pre-K)	a. 365 million children aged 3\u201317 (demographic base)	a. RUSA & NEP infra investment	a. Intense competition for limited seats (IIT/AIIMS)	a. Affordable, modular, self-paced formats
b. Urbanization & nuclear families	b. RTE Act driving govt. school enrollment	b. New campuses in Tier 2+ cities (IIMs etc.)	b. Hybrid models: online + local centres	b. Only 49% of educated youth employable
c. Rising disposable income	c. Smartphone/5G expanding reach, Tier 2+	c. Rise of accredited online degrees	c. Tier 2+ access to top teachers online	c. Employer-led workforce upskilling

Strategic Government Initiatives

The Ministry of Education has allocated INR 1,39,289 crores in Union Budget FY27, up 14% over the revised FY26 estimates. Around 60% (INR 83,562 crores) has been allocated to school education and 40% (INR 55,727 crores) to higher education, reflecting continued focus on strengthening access, infrastructure and quality.

NEP-led System Transformation

Focus on Employability and Skill Integration

Infrastructure Expansion and Regional Access

Digital

Integration and Emerging Skills

(Amount in INR crores)

Expenditure of Ministry of Education

Departments	FY25 Actuals	FY26 Revised	FY27 Budget	Change from 25-26 RE to 26-27 BE
School Education	65,159	70,567	83,562	18%
Higher Education	45,577	51,382	55,727	8%
Total	1,10,736	1,21,949	1,39,289	14%

Company Overview

Physicswallah (PW) is Indias most comprehensive education platform, delivering learning across test preparation, school education, upskilling and professional development through an integrated online, offline and hybrid model. Incorporated in June 2020 and listed in November 2025, PW closed FY26, first full year as a public company with 35% revenue growth to INR 3,900 crores. The Company operates 16+ online categories that have each crossed INR 10 crores in annual collections, spanning JEE, NEET, UPSC, Online K12 and Early Learning, GATE, Defense, CA, M.B.A., Government Exams, Post Graduate courses and professional upskilling.

FY26 at a Glance
Revenue (INR)	Online categories
3,900 Cr	16+
(+35% YoY, 74% 3-yr CAGR)	each crossing I10 Cr in annual collections
Pre-IndAS EBITDA (INR)s	Offline centres
300 Cr	353
(+221% YoY)	across 178 cities in India and 6 in UAE
PBT (INR)	Treasury (INR)
10 Cr	5,027 Cr
full year PBT-positive year	(incl. IPO proceeds)
Learners	Cash flow from operations (INR)
5.34 M	833 Cr
(+20% YoY)	(+64% YoY)

The Companys differentiated business model is supported by four core capabilities:

Community: A large and engaged learner community that drives strong organic reach, learner engagement and referrals.	Technology: A technology-enabled platform that delivers scalable, personalised and interactive learning experiences, now powered by proprietary in-house AI models
Content: High-quality academic content developed by experienced faculty and subject matter experts across multiple educational categories.	Pedagogy: A learner- centric teaching methodology focused on conceptual understanding, engagement and improved learning outcomes.

Why do students prefer PW?

Students choose PW for its unique combination of affordability, academic excellence, and accessibility. The Companys disruptive pricing makes high-quality education affordable, while its network of experienced faculty delivers a comprehensive learning experience through mentorship, daily doubt resolution, assessments, revision support, and technology-enabled pedagogy. Coupled with PWs extensive course portfolio and omnichannel delivery model, this learner-first approach has made it one of Indias most preferred education platforms.

Scale	Engagement	Reach
89.4 M	3.3 M+	142 M+
App downloads	Daily active learners	Social media community
6,837	104 Min+	9.5 B+
Faculty strength	Per day Average engagement time	YouTube views across channels

As of 31st March, 2026

4.87 million

Paid online enrolments (FY26)

468 K

Paid offline enrolments across

353 centres (FY26)

North Star Metrics

Student engagement lies at the core of PWs growth strategy. It is a leading indicator of platform strength, demonstrating that learners continue to choose PW, remain actively engaged, and deepen their relationship with the platform over time. By consistently delivering high-quality educational experiences, the Company builds learner trust, which in turn strengthens engagement and creates a foundation for sustainable long-term growth.

3.3M	26.8 M
DAU	MAU
10.1 M	4.2
WAU	Average Faculty Rating (Offline and Hybrid)
4.8
Average Faculty Rating (Online)

Online Segment

PW is present across every segment of the Indian education market, from K-12 and test preparation to higher education and upskilling. The chart below maps the Companys brand portfolio to the education industry segments.

THE LEARNER LIFETIME FUNNEL
ONLINE K-12 AND EARLY LEARNING	HIGHER EDUCATION	PROFESSIONAL	CAREER GROWTH
PW Kids	JEE	Civil Services	Earners
For Little Ones	Main + Advanced	M.B.A.	Video Editing, Data Analytics, AI, and other courses
Curious Jr.	NEET UG	CAT, XAT, SNAP, NMAT GMAT, IPMAT	PW Skills
Classes 1-9	MBBS / BDS		Data Science, Web Development, AI / ML, Finance, Healthcare
CBSE / ICSE Boards	Defence	Government Exams
Olympiads	LAW	SSC, CDS, JAIIB, TET, CTET
NSO, IMO, RMO	CLAT, Judiciary	GATE
State Boards	CUET	Engineering PG
Foundation	Design / Arch / Pharma	CA, CS, ACCA, CFA
Classes 6 th to 10 th	NID, NATA, Pharma	NEET PG
Commerce		Acadfly
School Integrated Programme (SIPs)		Study Abroad Services

PW Talk -Spoken English & Communication	Gyaan-E -300+ Micro-Courses
PW Books- Interactive digital books	PW PI OTT -Pocket & Self-Paced Courses
	PW Medharthi- Online UG & PG Degrees, Upskilling & Emerging Skills

Note: Test Preparation spans both the Higher Education entrance funnel (JEE, NEET, CUET, Design/Arch/Pharma) and Professional Exams (GATE, CA/CS/CFA, M.B.A., NEET PG). Grouping here is simplified for readability and doesnt imply non-overlapping categories.

Category-wise Online Enrollments

Student Number In000s

Category	FY26 (\u2018000s)	FY25 (\u2018000s)
IIT-JEE	646.4	573.4
NEET	998.2	927.3
Board + CUET	316.8	193.5
CA	76.8	48.2
Civil Service Exam	292.1	143.5
Commerce	80.8	52.9
Defence	103.4	96.9
Foundation	753.3	528.1
GATE	87.1	74.0
Government Exams	906.6	929.7
M.B.A.	28.7	24.0
Others	1306.8	1117.9
Skills	29.2	24.8
NEET PG	27.3	14.6
Law	14.6	11.3
IIT JAM & CSIR NET	46.3	35.7
Total	5,714.5	4,795.7
Unique Transacting Learners	4,868.1	4,130.8
JEE & NEET Share	29%	31%

Key Highlights:

1. 13 of PWs 16 categories delivered double-digit enrollment growth in FY26.

2. The largest TAM among PWs four segments. PW taught ~1.15 million students across Online K12 and Early Learning in FY26, up 49% YoY. Building a broader, lifelong learning ecosystem

3. PW remains the market leader in JEE and NEET, at an estimated ~20% penetration in both, the categories the platform was built on.

4. Now expanded into multiple Vernacular languages with enrolment growing by 102%

5. Value-added services (Infinity, Infinity Pro) and small cohort learning programs (Curious Jr. and Power Batch) are driving increased monetisation per user.

How the online categories perform in terms of profitability

High Profitability

Mature, consistent contributors to profitability, providing the Company with headroom to continue investing in content and faculty while still delivering healthy returns

Path to Higher Profitability

Already contributing positively to the bottom line with room to improve as they scale

Growth Investments - Large Opportunity

Enrollment scaling faster than near-term profitability as the Company builds its marketposition.TheCompanyexpectsthesecategoriestofollowaprofitability trajectory similar to that already achieved across its mature categories.

NEET	CA	Commerce
JEE	M.B.A.	Board + CUET
GATE	UPSC	State PSCs
Foundation	Govt Exams	State Boards
NEET PG	Skills
Curious Jr.	Vernacular

Offline Segment

An Extension of the PW Online Ecosystem

Category	Centres as on March 31, 2026	FY26 Enrolment Count (000s)	Centres as on March 31, 2025	FY25 Enrolment Count (000s)
PW Vidyapeeth Centres	139	256.6	79	180.1
PW Pathshala Centres	84	42.9	47	28.3
PW Other Centres	62	48.1	19	16.9
Total Subsidiaries Centres	68	119.8	53	100.3
Total	353	467.5	198	325.6

Offline is not built as a standalone coaching network, its designed as an extension of PWs online ecosystem, embedding the same technology, content and academic systems into the physical classroom. Online remains the primary mode of learner engagement, with majority of the offline paid learners accessing PW through the online channel.

PWs most mature offline format, Vidyapeeth contributes ~70% of offline revenue and made significant strides towards profitability this year, driven by stronger unit economics at the centre level

Profitability is being driven through multiple operating levers, Student-Teacher Ratio, Seat Utilization, Average Faculty Cost (via the Faculty Training Programme), ARPU (via test series, mentorship, hostel value-adds), and the Academic-to-Non-Academic staff ratio.

Centre economics follow a clear maturity curve, profitability builds as enrolments grow and fixed costs get absorbed. FY24 vintage centres were all EBITDA-profitable in FY26; A shift to a smaller, hyperlocal format from 2024 has sharpened unit economics further, with newer centres now reaching profitability within 24 months, faster than earlier cohorts.

	Opportunity Landscape
Industry Opportunity Landscape	Company Positioning and Strategic Response
Large and underpenetrated education market across segments	Present across test prep, upskilling and school education; scalable growth as online adoption remains early-stage.
Shift towards affordable, outcome-oriented learning models	Structurally lower price points (70-80% below alternatives) widen the addressable learner base across income segments.
Online Digital adoption enabling nationwide reach	Scaled online ecosystem + high engagement drive efficient, nationwide learner acquisition.
Growing adoption of hybrid learning	Omnichannel platform: online delivery + 353 physical centres across 178 cities and 6 in the UAE.
Expansion into new exam categories and adjacent segments	Continues to diversify into adjacent categories broadening its addressable market.
Rising demand from Tier 2, Tier 3 and vernacular markets	Deepening its presence across non-Hindi speaking regions through multilingual content offerings and regional expansion initiatives.
Increasing preference for integrated learning ecosystems	Integrated content, assessment, mentorship and performance-tracking stack drives cross-category monetisation.
Emergence of AI-driven learning and personalization	The Company is embedding AI throughout the learner lifecycle to enhance personalisation, improve scalability and reduce dependence on manual academic intervention.
Strong free-to-paid conversion opportunity	The Company benefits from a large learner community and strong social media reach, creating an organic and cost-efficient funnel for paid user conversion and long-term growth.

Challenges

The Company operates in a competitive and evolving education landscape, where maintaining differentiation requires continuous investment in content quality, faculty capabilities and student outcomes. As the business expands across categories and geographies, ensuring consistency in academic delivery and learner experience becomes critical to sustaining trust and long-term engagement. The increasing scale of operations, across hybrid formats also requires careful execution to maintain efficiency while preserving quality.

The sector is subject to evolving regulatory oversight, including guidelines around course delivery, pricing transparency and student protection, which may necessitate ongoing alignment of business practices. In addition, while education remains a priority for households, affordability considerations in price-sensitive segments may influence enrollment decisions in a competitive environment with multiple alternatives.

The Companys continued growth also depends on its ability to attract and retain high-quality faculty and academic talent, which remains a key differentiator in a content-driven business. At the same time, increasing reliance on online digital platforms necessitates robust technology infrastructure, data security and platform reliability to ensure uninterrupted delivery and a consistent user experience.

Company Outlook

Physicswallahs strategic foc usre mains on scaling its platform across a wider learner base by utilizing its affordability-led model and expanding its addressable market. Growth is anchored in broadening its presence across education categories and strengthening its positioning in mass-market segments, supported by increasing online digital adoption and low online penetration.

The Company is also focused on strengthening its integrated learning ecosystem by enhancing product offerings, deepening regional reach and utilising its omnichannel model to improve accessibility and engagement. Continued investments in content, faculty and platform capabilities are expected to support scalable growth while enabling the Company to address diverse learner needs.

Key Business Highlights

Platform Scale and Growth

Physicswallah strengthened its position as a scaled, multi-category education platform during FY26, driven by expansion across offerings, deeper market penetration and continued evolution of its omnichannel model. Revenue grew by 35% YoY in FY2025-26, supported by continued scale-up across core and emerging categories.

The Companys growth was supported by a steady increase in its learner base, with total learners reaching 5.4 million in FY26.

Expansion Across Test Preparation Categories

The Company extended its presence beyond core engineering and medical segments into 16 key categories, including civil services, government examinations, commerce and professional courses, diversifying its learner base and reducing dependence on a limited set of examinations.

Growth in Foundational Segment

The Company scaled its foundational offerings, with the State Board vertical recording more than ~2.5 lakh enrolments within its first year.

Expansion in Regional and Vernacular Markets

Expansion into non-Hindi speaking regions gained momentum, with ~1.4 lakh paid learners added across regional language offerings, supported by content in Marathi, Bangla, Gujarati, Kannada and Odia.

This approach has opened access to underserved markets and strengthened the Companys positioning as a mass-market education platform.

AI-Led Innovation

The Company has embedded artificial intelligence across its platform to enhance personalization and automate academic support.

AI Guru	Ask AI	AI Grader	AI Mentor
Provides real-time doubt resolution by answering academic queries instantly, reducing reliance on manual intervention and resolving approximately 4.5 million queries per month.	Functions as an interactive query assistant, supporting concept clarification and academic queries and handling around 1.9 million queries.	Automates the evaluation of subjective answers, enabling faster and more consistent assessment and has evaluated over 1 million answer scripts.	Delivers personalised study guidance by tracking progress and recommending tailored learning pathways, supporting more than 400,000 students.
AI Books	AI Sahayak	PW Drona	TeacherX
AI-enabled academic support solution integrated into digital learning content to improve accessibility, concept understanding and student engagement.	AI-based support tool focused on learner planning and goal-setting, helping students manage academic schedules and study priorities more effectively.	Performance tracking and analytics platform that monitors learner progress, assessment outcomes and engagement patterns to support data-driven interventions.	AI-led operational support platform that automates faculty- related workflows such as lecture management and class operations

PW Talk

AI-driven English learning platform that enables conversational practice with real-time feedback, supporting communication and spoken English skill development.

Beyond the classroom, AI is also compressing PWs own cost-to-serve: AI voice agents now handle 6,000+ calls/day (~75% cheaper than human-led calling), an AI-based lead-routing model processed 2+ crores leads at ~96% revenue conversion efficiency while calling only ~65% of leads. 91% of engineering code is now AI assisted, driving 2x faster release cycles.

Innovations

Innovation remains at the core of Physicswallahs growth strategy. Guided by a student-first philosophy, the Company continuously identifies evolving learner needs and develops technology-enabled, outcome-driven solutions that make education more accessible, engaging and effective. Innovation is guided by a simple principle-building student-first products that solve real learning challenges and improve outcomes across every stage of the learner journey. During FY26, Physicswallah expanded its product ecosystem through new launches and feature enhancements. Key launches included PW Talk, an AI-powered spoken English platform that enables real-time conversational practice with personalised feedback and has surpassed 2 million sign-ups since launch; Earners, which equips learners with practical, income-generating digital skills; PW Games, a learning-first gaming platform that transforms screen time into curriculum-aligned educational experiences for K–8 students; PW OTT, a dedicated platform for premium educational content and learning-focused entertainment; and Gyaan E, a subscription-based micro-learning platform offering bite-sized, industry-relevant courses with verifiable certifications; and PW Books, smart digital books that combine reading, highlighting and interactive quizzes to create an engaging learning experience, achieving 1.4 million+ downloads with a 4.7 user rating.

These innovations are powered by Ai and data analytics to deliver personalised learning pathways, identify performance gaps and provide targeted interventions. Together, they strengthen the Companys hybrid learning ecosystem and reinforce its commitment to making high-quality, affordable education more accessible, engaging and outcome-oriented.

Risks and Concerns

Physicswallah follows a structured approach to identifying and managing risks arising from its operations, market environment and evolving regulatory landscape. Given its presence across multiple education categories and delivery formats, the business is exposed to factors such as shifts in demand across major examination segments, increasing competition, technology-related disruptions and regulatory developments. In addition, growth is influenced by the Companys ability to sustain brand relevance, attract and retain qualified faculty and effectively scale its offerings across geographies and learner segments.

To mitigate these risks, the Company continues to diversify its course portfolio beyond core test preparation categories, expand its presence across regional markets and strengthen its omnichannel delivery model. Investments in technology infrastructure and platform capabilities support reliable content delivery and data security, while structured academic processes and faculty development initiatives aim to maintain content quality and learner outcomes.

The Company also maintains robust internal controls and compliance mechanisms to address regulatory requirements and support disciplined execution as it expands into new categories and markets. This integrated approach enables the alignment between risk management and growth strategy, strengthening the Companys ability to operate in a dynamic and competitive environment.

Financial Performance

Consolidated P&L Statement

(Amount in INR Crore)

Particulars	FY26	FY25	YoY Change
Revenue from Operations	3,899.54	2,886.64	35.09%
Other Income	231.50	152.45	51.86%
Total Income	4,131.04	3,039.09	35.93%
Direct Expenses	599.61	513.34	16.81%
Purchase of Traded Goods	78.50	54.46	44.14%
Change in Inventories	(15.48)	(18.29)	NA
Cost of Raw Materials & Components	101.86	86.54	17.70%
Employee Benefits Expense	1,905.98	1,401.24	36.02%
Finance Costs	101.89	85.32	19.42%
Depreciation & Amortisation Expense	437.39	366.42	19.37%
Net Loss on Fair Value Remeasurement	10.77	114.63	(90.60%)
Other Expenses	848.29	661.19	28.30%
Total Expenses	4,068.81	3,264.85	24.62%
Profit/(Loss) Before Exceptional Items & Tax	62.49	(225.88)	Turnaround
Exceptional Items *	52.57	32.67	60.91%
Profit/(Loss) Before Tax	9.92	(258.55)	Turnaround
Total Tax Expense/(Credit)	34.09	(15.29)	NA
Profit/(Loss) After Tax	(24.17)	(243.26)	Loss reduced by 90.06%

* Exceptional items comprises impairment of intangible assets and goodwill, expenses incurred towards the Initial Public Offer, and the remeasurement impact on employee benefit obligations pursuant to labor code changes

Total Income

Revenue

Physicswallah primarily generates revenue from three sources:

(i) Sale of Services, comprising online, offline and hybrid coaching programs, along with hostel, transportation and content access services;

(ii) Sale of Products, including books, stationery, merchandise and tablets sold through both direct-to-consumer and B2B channels; and

(iii) Other Operating Income, comprising advertisement revenue from the Companys digital platforms, primarily YouTube, and ancillary student services.

Revenue from operations increased by 35.09% to INR 3,899.54 crores in FY26 from INR 2,886.64 crores in FY25, driven by continued strong growth across the Companys business segments. Online contributed 51.57% of total revenue from operations, generating revenue of INR 2,011.11 crores. Unique transacting learners rose 18% to 4.9 million, supported by broad-based momentum, with 13 of the Companys 16 categories delivering double-digit enrollment growth. Average collection per user (ACPU) expanded 11.4% to INR 4,104, driven by strong uptake of value-added services. Offline contributed 47.29% of total revenue from operations, generating revenue of INR 1,844.11 crores, making Physicswallah the fastest-growing player in the offline segment. The network expanded from 198 centres to 353, with student enrolments crossing 0.5 million. Average revenue per user (ARPU) was INR 36,625, down 9% year on year, reflecting a change in segment mix as the network broadened across categories and geographies. Others contributed 1.14% of total revenue from operations, with revenue of INR 44.32 crores, comprising the sale of hardware devices, student financing services and support services.

Other Income

Other income increased by 52.85%, from INR 152.45 crores in FY25 to INR 231.50 crores in FY26, primarily driven by higher interest income and capital gains on treasury investments. This was on account of increased treasury balances, resulting from stronger operating cash flows and proceeds from the primary issue during the Companys Initial Public Offering (IPO) in November 2025.

Expenses

Direct expenses: primarily include

(i) professional fees paid primarily to the Companys faculty hired on a contract or consultancy basis;

(ii) server expenses for operating the Companys technology stack and cloud charges;

(iii) student test expenses related to printing test papers, optical mark recognition (OMR) sheets and booklets, as well as the costs for computer-based mock tests;

(iv) hostel rent and kitchen expenses for operating student hostels or residential buildings;

(v) academic expenses for printing charges for books and modules, that are sold to students; and

(vi) student support services for counsellors, relationship management services and calling tools. Direct expenses as a percentage of revenue improved by 241 bps, from 17.78% in FY25 to 15.37% in FY26, driven by better operational efficiencies along with savings in professional fees.

Purchase of traded goods primarily includes expenses related to the purchase of merchandise, such as bags, T-shirts, hoodies, water bottles, and other items provided as welcome kits to students enrolled in the Companys offline classes, as well as merchandise sold through its platforms. Cost of raw material and components consumed primarily represents the cost of paper used for printing books and modules. Together with Change in Inventories of stock in trade and finished goods, these costs accounted for 4.23% of revenue from operations in FY26, compared with 4.25% in FY25.

Employee benefits expense: primarily include salaries, wages and bonus paid to the Companys employees and contribution to provident and other funds. It also includes expenses related to share based payment to employees, gratuity expenses, leave encashment and staff welfare expenses. Employee benefit expenses, excluding Share based payment to employees, decreased to 44.49% of revenue from operations in FY26 from 45.37% in FY25. The decline was primarily driven by the implementation of efficiency measures to improve the student-teacher ratio and the introduction of technology-backed tools to optimize manpower-related costs. Share based payment to employees increased to 4.39% of revenue from operations in FY26 from 3.17% in FY25.

Finance costs primarily comprise interest expense on lease liabilities recognized under Ind AS 116 for the Companys offline centres, offices, other buildings, and recording studios, as well as interest expense on external debt and borrowings. Finance costs accounted for 2.61% of revenue from operations in FY26, compared with 2.96% in FY25.

Depreciation and amortisation expense: primarily relate to depreciation on property, plant and equipment and depreciation of right-of-use assets. The Company also incurs amortisation expenses of other intangible assets such as brand, content, licenses and software. Such expenses accounted for 11.22% of revenue from operations in FY26, compared with 12.69% in FY25.

Net gain/(loss) on remeasurement of financial instruments at fair value represents the period-on-period change in the fair value of financial instruments measured at fair value, recognized in the profit and loss statements in accordance with the applicable accounting standards. During FY26, the Company reported INR 10.77 crores, compared with INR 114.63 crores in FY25.

Other expenses: primarily includes

(i) advertisement and publicity expenses incurred to promote the Companys brand and services,

(ii) power and fuel expenses

(iii) housekeeping charge,

(iv) security expenses, and

(v) travelling and accommodation expenses, among others. Other expenses accounted for 21.75% of revenue from operations in FY26, compared with 22.91% in FY25. The savings in other expenses was primarily driven by operating efficiencies across various cost heads, with the largest contribution from Advertisement and publicity expenses, which decreased to 9.07% of revenue from operations in FY26 from 9.57% in FY25. The reduction was primarily attributable to increased brand affinity among students, driven by successful student outcomes, a wide range of affordable offerings, and stronger word-of-mouth marketing. The table below sets out the key components of other expenses.

(Amount in INR Crores)

Expense Head	FY26	FY25
Advertisement and publicity expenses	353.57	276.23
Power and fuel expenses	58.21	52.33
Housekeeping charges	54.65	27.58
Travelling expenses	47.53	33.16
Subscription and periodicals	53.12	27.06
Freight and forwarding charges	34.16	23.21
Legal and professional charges	34.76	30.05
Office expenses	26.23	20.68
Security expenses	23.57	34.04
Commission expenses	23.32	12.80
Rates and taxes	20.70	19.44
Repairs & maintenance \u2013 Building	19.88	16.75
Other Expenses (balance of all remaining expense heads)	98.59	87.86
Total Other Expenses	848.29	661.19

Tax Statement

The Group reported a consolidated net loss after tax of INR 24.17 crores for FY26. During the year, the deferred tax asset balance decreased by INR 7.32 crores, primarily on account of three factors. First, deferred tax assets of INR 24.85 crores were reversed following the utilization of carried-forward tax losses against taxable profits generated during the year. As at year end, the Group continues to carry forward unabsorbed depreciation and tax losses amounting to INR 51.10 crores, representing a deferred tax asset of INR 12.86 crores, which management expects to utilize against future taxable profits based on approved business plans and projected profitability. Second, the Group recognized net deferred tax assets of INR 31.76 crores during the year in relation to deductible temporary differences arising in the ordinary course of business. Third, pursuant to the acquisition of Sarrthi IAS during the year, the Group recognised a deferred tax liability of INR 14.23 crores on separately identifiable intangible assets and other assets recognised as part of the acquisition accounting.

Profitability Analysis

(Amount in INR Crores)

Particulars	Fiscal ended March 31, 2026	Fiscal ended March 31, 2025
Profit/(Loss) Margin for the year (%)	(0.62%)	(8.43%)
Pre IND AS EBITDA	300.20	93.65
Pre IND AS EBITDA Margin (%)	7.70%	3.24%
EBITDA	549.20	193.20
EBITDA Margin (%)	14.08%	6.69%
Adjusted EBITDA	783.69	431.97
Adjusted EBITDA Margin (%)	20.10%	14.96%
Net Worth	5,103.51	1,945.37
Return on Net Worth (%)	(0.47%)	(12.5%)
Net Asset Value per Equity Share (INR )	18.83	7.73

The Companys improved significantly in FY26, driven by strong revenue growth, improved operating leverage, and disciplined cost management. Pre-Ind AS EBITDA more than tripled to INR 300.20 Crores in FY26 from INR 93.65 Crores in FY25, with the Pre-Ind AS EBITDA margin expanding to 7.70% from 3.24%. EBITDA increased by approximately 2.84x to INR 549.20 Crores from INR 193.20 Crores, resulting in an improvement in the EBITDA margin to 14.08% from 6.69%.

The Companys PAT loss reduced by approximately 90%, from INR 243.26 Crores in FY25 to INR 24.17 Crores in FY26, with the PAT margin improving to (0.62%) from (8.43%). This improvement reflects stronger operating leverage and tighter cost discipline across all major cost heads, particularly Direct Expenses, Employee Benefit Expenses (excluding Share based payment to employees), and Marketing. These efficiencies were driven not merely by cost rationalization but also by the adoption of AI-led automation and technology-enabled process improvements across functions, which enhanced productivity while supporting continued business growth.

Key Reconciliations

Revenue to PAT Bridge

(Amount in INR Crores)

Operational Metrics	FY26	FY25
Revenue From Operations	3,899.54	2,886.64
YoY Growth	35.09%	48.76%
Less: Direct expenses & Inventory movement 1	764.49	636.05
Less: Employee benefits expense (Excludes Share based payment to employees)	1,734.83	1,309.78
Less: Other expenses	848.29	661.19
Less: Payment of Lease Liabilities 2	251.99	185.87
Total expenses	3,599.60	2,792.87
Share of profit/(loss) of associates (net)	0.26	(0.12)
Pre-Ind AS EBITDA	300.20	93.65
Pre-Ind AS EBITDA Margin %	7.70%	3.24%
Add: Payment of Lease Liabilities 2	251.99	185.87
Add: Other income	231.50	152.45
Adjusted EBITDA	783.69	431.97
Adjusted EBITDA Margin %	20.10%	14.96%
Less: Share based payment to employees	171.15	91.46
Less: Exceptional items 3	39.78	147.30
Less: One-time Expenses 4	23.56	\u2013
EBITDA	549.20	193.20
EBITDA Margin %	14.08%	6.69%
Less: Finance costs	101.89	85.32
Less: Depreciation & amortisation expense	437.39	366.42
Profit/(Loss) Before Tax	9.92	(258.55)
PBT Margin %	0.25%	(8.96%)
Less: Total tax expense/(credit)	34.09	(15.29)
Profit/(Loss) for the year	(24.17)	(243.26)
Profit/(Loss) Margin %	(0.62%)	(8.43%)

1 Direct expenses & Inventory movement represent the combined total of Direct Expenses, Purchases of Traded Goods, Changes in Inventories, and Cost of Raw Materials and Components Consumed.

2 Payment of Lease Liabilities represents the total of the interest portion and the principal portion of lease liability payments.

3 Exceptional Items includes Net loss/(gain) on remeasurement of financial instruments at fair value and Exceptional Items (Other than One Time Expenses)

4 One Time Expense includes Expenses incurred towards Initial Public Offer and Remeasurement impact on employee benefit obligations pursuant to labor code changes (INR in Cr, unless otherwise stated)

Risk Management & Internal Control Systems

The Company recognises that a disciplined approach to risk management is essential for sustaining growth in a dynamic business environment. As the business expands across products, geographies and delivery formats, potential risks are continuously identified, assessed and monitored to minimize their impact on operations, financial performance, regulatory compliance and reputation. Risk considerations are integrated into key business and strategic decisions across the organization.

The Board of Directors has overall responsibility for overseeing the Companys risk management framework. The Risk Management Committee assists the Board by reviewing the enterprise risk profile, monitoring emerging risks and evaluating the effectiveness of mitigation measures. The Audit Committee oversees the adequacy of internal financial controls, reviews the findings of internal audits and monitors compliance with applicable statutory and regulatory requirements.

Risk management is a shared responsibility across the organisation: business and functional teams manage risks within their own areas, while specialized functions - Finance, Legal, Compliance, Information Security, Human Resources and Risk Management, set governance frameworks and monitor adherence to policy. Internal Audit provides independent assurance on the control environment through risk-based audits under the annual audit plan approved by the Audit Committee.

The Companys Enterprise Risk Management (ERM) framework covers strategic, operational, financial, regulatory, technology, cybersecurity and people-related risks. The enterprise risk register is reviewed periodically by management and the Risk Management Committee to assess changes in the risk landscape, monitor mitigation plans and strengthen internal controls wherever necessary.

Key Enterprise Risks and Mitigation Measures

Set out below are certain key risks identified by the Company, together with the measures adopted to mitigate them. This is not an exhaustive list of all risks and uncertainties facing the Company, and additional risks not presently known, or currently considered immaterial, may also affect the Companys business, financial condition and results of operations.

Academic Quality and Learner Outcomes:

The Companys reputation and growth depends on delivering consistent academic outcomes across online and offline formats. This is managed through standardized curriculum development, periodic content reviews, structured faculty development and continuous monitoring of learner feedback and academic performance indicators.

Technology, AI and Cybersecurity:

Uninterrupted platform availability and data security are integral to operations, particularly during peak learner activity, alongside the need to responsibly evaluate emerging AI capabilities. The Company invests in scalable cloud infrastructure, disaster recovery, role-based access controls, encryption and continuous security monitoring, together with defined AI governance processes.

Faculty and Talent Management:

The Companys ability to attract, develop and retain high-quality faculty and technology talent is critical to learner outcomes and future growth. This is addressed through structured onboarding, leadership development, performance management, succession planning and employee engagement initiatives.

Competition and Brand:

The Company operates in a competitive and evolving education market and may face new entrants, alternative learning models or aggressive pricing from existing players. Brand trust, built on academic outcomes and affordability, is a key differentiator; the Company manages this through continuous product innovation, learner-centric service processes, grievance redressal mechanisms and proactive brand management.

Regulatory and Compliance:

The education, technology and data-privacy regulatory landscape continues to evolve, including requirements around course delivery, pricing transparency, student protection and data protection (DPDPA). Dedicated Legal and Compliance functions monitor regulatory developments, update internal policies and conduct periodic compliance reviews, with oversight from the appropriate Board Committees.

Financial Discipline and Execution:

Continued investment in technology, content and offline expansion requires careful execution and financial discipline to protect liquidity and unit economics as the Company scales into new geographies. This is supported by structured budgeting, treasury management, cash flow forecasting and standardized operating procedures for new-centre rollout, reviewed periodically by management.

Internal Control Systems and their Adequacy

The Company has established internal control systems, supported by a comprehensive internal audit programme, designed to ensure the accuracy and reliability of financial records and proper accountability of assets. These controls are commensurate with the size and complexity of operations and are reviewed periodically by the Audit Committee, with corrective actions tracked to closure.

Human Resources

The Companys people strategy is centred on building a scalable, high-performance organization, supported by a strong focus on employee engagement, capability development and a culture aligned with its mission of delivering accessible and outcome-oriented education.

The Company focuses on building an inclusive and supportive work environment that prioritizes employee well-being, flexibility and collaboration. It also invests in structured learning and development programs to strengthen internal capabilities and support career progression. Initiatives such as the Emerging Leaders Program and the I-3 Initiative (Idea, Innovation and Initiatives), along with hackathons and recognition programmes, encourage innovation, leadership development and continuous learning across the organisation, enabling it to support expanding operations and evolving business requirements.

The Company also places significant emphasis on strengthening teaching excellence across its educator ecosystem. Faculty members undergo structured onboarding, pedagogy alignment and continuous capability development through the Faculty Training Programme (FTP), supported by regular student feedback and performance ratings that help enhance classroom engagement, teaching effectiveness and learning outcomes across online, offline and hybrid formats.

As of 31st March, 2026, the Company had a workforce of 18,977.

Cautionary Statements

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied in such statements due to factors beyond the Companys control. The Company makes no commitment to publicly amend, change, or revise any forward-looking statements based on subsequent developments.

Disclosure of Accounting Treatment

The financial statements of the Company have been prepared in accordance with the applicable provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under Section 133 of the Act, read with the relevant rules thereunder. The accounting policies have been applied consistently, and there has been no material departure from the prescribed accounting standards in the preparation of the financial statements during the year under review.