Alakh Pandey-led Physicswallah shares up 42% in 6 months; Motilal Oswal sees further upside

Shares of Alakh Pandey-led Physicswallah have been on a solid uptrend lately, rising more than 40% over the last six months, and it may have more steam left, according to brokerage firm Motilal Oswal Financial Services. Physicswallah's share price has jumped 42% year-to-date compared with an 8% decline in the equity benchmark Sensex. On a monthly scale, it is up 14% so far in October after a 6% rise in September. Shares hit their 52-week low of ₹77.75 on 4 March this year after rising to a 52-week high of ₹162.05 on 18 November last year. On Thursday, 8 October, the stock climbed 1.11% to end at ₹140.95 on the BSE, extending gains for the fourth consecutive session.Motilal Oswal sees further upsideBrokerage firm Motilal Oswal Financial Services believes Physicswallah's multiple independent growth legs suggest nearly 30% online CAGR for the next 3-4 years, with sustained EBITDA improvement over the same period."We believe Physicswallah combines a near-monopoly position in online test prep, negative working capital, and multiple independent growth legs in K-12, state boards, new categories, and the South. With offline nearing break-even in FY27, we see EBITDA compounding from nearly ₹600 crore in FY27E to nearly ₹2,000 crore in four years," said Motilal Oswal."We assign a multiple of 50 times FY28E EV/EBITDA to the online business, reflecting its market leadership, scalable business model, and superior unit economics. We value the offline business at 15 times FY28E EV/EBITDA to reflect its execution intensity, time to maturity, and lower margin profile," said Motilal Oswal.Physicswallah share price targetMotilal Oswal has a buy call on the stock with a target price of ₹200, implying a 43% upside potential."We value other businesses at 1 time FY28E EV/sales. Adjusting for cash, we arrive at a target price of ₹200, implying a 43% upside. We reiterate our 'buy' rating on the stock," said Motilal Oswal.Read all market-related news hereRead more stories by Nishant KumarDisclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.