Physicswallah Q2 FY27 Results (NSE: PWL)
Signal: Slipped to loss
The read
The operating inflection is meaningful but not yet durable: standalone revenue rose 19.2% QoQ to ₹1,105.96 Cr and derived EBITDA margin expanded to 22.3% from negative 5.6%, helped by broadly flat employee costs of ₹472.42 Cr; however, PAT remained negative at ₹26.34 Cr after ₹54.92 Cr impairment, while other income of ₹93.39 Cr materially supported pre-tax earnings. The fixed-asset base also fell 4.3% while depreciation rose, warranting monitoring of capitalisation and asset productivity.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,105.96 Cr | N/A | +19.2% |
| EBIT | ₹246.16 Cr | N/A | |
| Net profit | ₹-26.34 Cr | N/A | |
| EPS | ₹-0.09 | N/A | |
| EBIT margin | 22.3% |
P&L walk
Standalone revenue increased to ₹1,105.96 Cr, up 19.2% QoQ, and derived EBIT recovered to ₹246.16 Cr from a ₹51.68 Cr loss, but ₹54.92 Cr of impairment exceptional expense and ₹93.39 Cr of other income left PAT at a ₹26.34 Cr loss.
Key positives
- Standalone revenue increased to ₹1,105.96 Cr, up 19.2% QoQ, taking the business above ₹1,000 Cr for the second consecutive quarter in the reported series.
- Derived EBITDA rose to ₹246.16 Cr from negative ₹51.68 Cr QoQ, with margin expanding to 22.3% from negative 5.6%.
- Employee benefits expense was ₹472.42 Cr, virtually flat versus ₹473.18 Cr QoQ, while revenue grew 19.2%, supporting the quarter's operating-margin recovery.
- Operating cash flow remained positive at ₹793.42 Cr in H1FY27, although it was below ₹897.92 Cr in H1FY26.
Key concerns
- PAT remained negative at ₹26.34 Cr despite derived EBITDA of ₹246.16 Cr, showing that operating recovery has not yet translated into reported profitability.
- ₹54.92 Cr of exceptional impairment on investments in subsidiaries reduced pre-tax profit and makes the quarter's loss less representative of recurring operations.
- Other income of ₹93.39 Cr was material relative to derived EBIT of ₹246.16 Cr, increasing reliance on non-operating income in the reported result.
- Advertising expense was ₹76.94 Cr in Q2FY27, or 7.0% of revenue; although down from ₹113.45 Cr QoQ, sustained customer-acquisition spending remains a key margin variable.
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