Physics Wallah In The Red, Reports Loss of INR 1,131 in FY24

The main reason for the sharp increase in loss in FY24 was the change in the fair value of CCPS, as well as the jump in ESOP and personnel expenses.

Physics Wallah also adjusted its FY23 earnings due to changes in accounting standards. The company had earlier reported a net profit of Rs 8.9 lakh in FY23.

The startup’s operating revenue grew 2.6 times to Rs 1,940.4 in FY24 from Rs 744.3 in the previous year.

Edtech unicorn Physics Wallah (PW) has slipped into the red for financial year 2023-24 (FY24), posting a consolidated net loss of INR 1,131.2 Cr. This is an increase of nearly 13.5 times compared to the loss of INR 84.06 Cr in FY23.

It is pertinent to note that the startup has adjusted its FY23 earnings due to a change in accounting standards. The company had previously reported a net profit of Rs 8.9 lakh for the financial year ended March 2023.

The main reason for the sharp increase in losses in FY24 was the change in the fair value of CCPS and the jump in ESOP and personnel expenses.

The startup said the change in fair value of CCPS in FY24 cost it Rs 756, compared to Rs 67.1 in FY23. ESOP expenses nearly quadrupled to Rs 151 during the year under review from Rs 38.3 in FY23.

On the revenue side, the startup’s operating revenue grew 2.6 times to Rs 1,940.4 in FY24 from Rs 744.3 in the previous year.

Founded in 2016 by Alakh Pandey and joined by Prateek Maheshwari in 2020, PW started as a YouTube channel and has since grown into a full-fledged edtech startup. It provides online and offline coaching and study materials for preparation of various competitive exams like NEET, JEE and others.

This September edtech unicorn received $210 million in Series B funding roundled by Hornbill Capital, with a post-money valuation of $2.8 billion. Lightspeed Venture Partners and existing investors GSV and WestBridge also participated in the funding round.

Where did PW spend?

Physics Wallah’s total expenses rose over 280% to Rs 3,279.1 from Rs 862.01 in FY23. Here’s a breakdown of the costs:

Employee benefit expenses: PW spent Rs 1,158.96 on employee expenses, which grew 180% from Rs 412.5 in FY23.

Advertising and promotion expenses: The startup wound down its branding activities in FY24 as expenses under this section fell over 70% to INR 19.56 from INR 67.09 in FY23.

Depreciation, depletion and amortization expenses: Expenditure under this block rose 297% to Rs 298.2 in FY24 from Rs 75.12 in the previous year.

Rental expenses: When the edtech company went offline in FY24, it paid rent worth INR 32.72 Cr during the financial year under review from zero in the previous financial year.

It is pertinent to note that ‘miscellaneous expenses’ was the largest cost driver for PW as the startup spent INR 1,452.7 Cr in FY24 compared to INR 169.73 Cr in FY23. However, it does not provide a breakdown of these costs.