PhysicsWallah shares extend losses for 3rd day: Should you go long? Here's what analysts say; check stop loss

The shares of PhysicsWallah were trading in the red on November 21, extending losses for the third session. Analysts have advised which investment strategy traders should take for the newly-listed stock.

The shares of the company saw significant volatility, surging sharply and then erasing all day's gains to trade in the red today. Earlier during the day, the stock surged more than 5 percent to trade at Rs 149.59 apiece, before erasing all intraday gains to trade over 1 percent lower at Rs 140.21 apiece, as seen at 12.24 pm.

The market capitalization of the company is currently stands at Rs 40,490 crore.

Sharp market-cap erosion amid selloff:

Earlier yesterday, PhysicsWallah's market capitalization had slipped below the Rs 35,000 crore-mark amid a sharp selloff that continued for three sessions after debut day. This implied a market cap erosion of nearly Rs 12,000 crore in just three sessions from the Rs 46,300-crore m-cap the company had at its peak on debut day.

PhysicsWallah market debut:

PhysicsWallah shares listed with a premium of more than 33 percent over the IPO price at Rs 145 apiece on NSE on November 18. At the end of the debut day, the stock surged further to close at Rs 156.49 apiece, marking a rise of nearly 44 percent from its IPO price.

PhysicsWallah share price: Should you buy, sell or hold?

Shivani Nyati, Head of Wealth at Swastika Investmart, had noted that competition from other edtech and offline coaching giants, regulatory uncertainties in the education sector, and the challenge of sustaining profitability during expansion remain key risks for the firm's growth.

The analyst had advised allotted investors to book partial profits and hold the remaining shares for medium-term growth with a stop loss at Rs 130 apiece.

Siddharth Maurya, Founder & Managing Director at Vibhavangal Anukulakara also advised caution. He noted that at current valuations, the real test is how a business converts millions of free users into paying subscribers while tightening its cost structure. "If PhysicsWallah manages to prove that regional expansion and hybrid models can give steady margins, it earns long-term credibility," he added.

"PhysicsWallah's sharp post-listing correction indicate a shift from euphoria to consolidation. Investors are waking up to the fact that high-growth stories must now justify their premium with profitability, retention, and execution discipline. In the near term, the stock is likely to trade sideways as expectations reset. Existing investors should hold with strict stop-losses, while new investors would be better off waiting for stability and earnings visibility before entering," he further said.

"There is value in the scale it can achieve, but the key headwinds are the presence of players like Unacademy, Byjus, and a hybrid mall, which scales slower than a pure platform play. With a stretched valuation, execution capability to achieve rapid, sustainable growth while retaining top educational talent would be the key if returns are to be made mid to long term," said Shravan Shetty, Managing Director, Primus Partners.

Abhinav Tiwari, Research Analyst at Bonanza, noted that the company remains persistently loss making despite FY25 EBITDA profitability. “Valuation is a key red flag as it is trading at 10.8x Price to Sales despite being loss making. The business also faces key person risk due to heavy dependence on founder Alakh Pandey, and its 303 offline centers create high rental and execution pressures. With the edtech sector still affected by the post Byju’s fallout, PW’s rising costs against 33% revenue growth in Q1 FY26 raise doubts about margin sustainability,” he said.

Khushi Mistry, Research Analyst at Bonanza, said that the recent correction should be seen as a healthy reset, helping adjust inflated expectations and shifting focus toward fundamentals such as profitability, margin expansion, and sustainable growth. The market is becoming more selective with new-age tech valuations in this volatile environment, she added.

About PhysicsWallah:

Founded as a YouTube channel in 2016, the company runs online and brick-and-mortar coaching centres, and is one of India's largest edtech firms by the number of students. The firm posted 49 percent revenue growth in FY25, with losses narrowing to Rs 243 crore from Rs 1,131 billion rupees in the previous fiscal.

PhysicsWallah's valuation exceeds that of its unlisted peers such as Temasek-backed upGrad, which was last valued at $2.25 billion and SoftBank-backed Unacademy, valued at $3.44 billion.

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