Archive · 16 Nov 2025
Physics Wallah Faces Challenges Expanding into India's Southern Test-Prep Market
Physics Wallah, a popular online education company from North India, is trying to grow in South India.
They recently had an IPO to get more money.
In North India, they became famous by offering cheap online classes and having a relatable founder.
However, South India is different.
Students there often attend schools that combine regular classes with test preparation all day, living in hostels.
Physics Wallah's main strategy of affordable online courses doesn't work as well there.
Their attempt in Kozhikode, Kerala, a key southern city, saw a big drop in revenue.
Even though they bought a local company, Xylem, to help them, their online student numbers are very low in the South.
They plan to open more physical centers, but experts say success in the South depends on showing good results for tough exams, which has taken established companies years to achieve.
Physics Wallah believes their same approach will work, but they need to adapt to win over students and parents in this new region.
Physics Wallah (PW) is facing difficulties expanding its test-prep business into South India, a market with distinct educational practices.
The company's revenue from Kozhikode, Kerala, a key southern hub, significantly declined in the first quarter of FY26, attributed to scaled-back hostel operations.
PW's successful 'richness-reach' model, based on affordable online courses and a relatable founder, is challenged by the South's established integrated school-coaching and residential models.
Despite a successful IPO, PW's online penetration in southern states remains very low compared to its strong presence in North India.
PW plans aggressive offline expansion in the South, but success will likely depend on adapting its strategy to local market demands and demonstrating strong academic outcomes.
- Who
- Physics Wallah (PW), an edtech company
- What
- Facing challenges in expanding its test-preparation services into the Southern Indian market, despite a recent IPO and plans for aggressive offline expansion.
- When
- The company's performance in Kozhikode declined in the first quarter of fiscal year 2026, and expansion plans are ongoing over the next three years.
- Where
- Primarily focusing on Southern India, including Kerala, Tamil Nadu, Karnataka, Telangana, and Andhra Pradesh, after establishing dominance in North India.
- Why
- The Southern market has a fundamentally different, integrated, and highly structured test-prep model, contrasting with PW's North Indian playbook of flexible online and hybrid formats.
- Physics Wallah (PW) IPO Size
- ₹3,480 crore
- Kozhikode Offline Revenue (Q1 FY26)
- ₹24 crore (down nearly 30% from previous year)
- PW Paid Online Penetration (Southern States)
- Karnataka: 8.8%, Telangana: 6.6%, Andhra Pradesh: 2.7%, Tamil Nadu: 1.1%, Kerala: 0.7%
- Test-Prep Market Size Projection
- Expected to approach ₹2 trillion by FY30
- Narayana Group and Sri Chaitanya Annual Revenue
- Nearly ₹10,000 crore combined
- PW Operating Revenue (FY25)
- ₹2,887 crore (up 49% from FY24)
- PW Net Loss (FY25)
- ₹243 crore (narrowed by almost 80%)