Pune: PhysicsWallah is expanding its education business beyond conventional test preparation, with artificial intelligence (AI), regional-language learning, personalised tutoring and degree programmes emerging as key elements of its next growth phase.
The company’s Q2 and H1 FY27 earnings call indicates a broader shift towards technology-led education delivery, while also highlighting the challenges of monetising new products and improving the economics of its offline operations.
The developments come as PhysicsWallah looks to diversify its learner base beyond Joint Entrance Examination (JEE) and National Eligibility cum Entrance Test (NEET) preparation.
Its latest disclosures also point to increasing reliance on AI for content production, assessments and software development, alongside plans to take live teaching programmes into more Indian languages.
However, the company’s disclosures also raise important questions about the commercial viability of AI tutoring, the impact of automation on education-related jobs and the ability of new business segments to generate sustainable revenue.
1. PhysicsWallah is using AI to change how educational content is produced
Artificial intelligence is increasingly becoming part of PhysicsWallah’s internal operations, extending beyond student-facing learning tools.
The company’s management linked a sequential decline in employee and faculty numbers to operational efficiencies achieved through AI.
These efficiencies were particularly associated with content creation, quality checks, test-paper preparation and the evaluation of answers, including subjective responses.
Management also disclosed that AI now writes approximately 90% of the company’s code.
The growing role of automation is reflected in PhysicsWallah’s technology expenditure. Its technology spending increased to ₹104 crore in H1 FY27, compared with ₹70 crore in the corresponding period.
However, the company has not disclosed how many jobs or positions have been affected by these changes. It has also not provided a breakdown distinguishing employee attrition from redundancies or explained how much human intervention continues in AI-assisted academic processes.
2. PhysicsWallah plans to expand live teaching across 12 Indian languages
Regional-language education is emerging as another important growth area for PhysicsWallah.
The company reported a 77% increase in vernacular enrolments during H1 FY27, taking the total to 1.23 lakh students across 10 languages.
Building on this growth, PhysicsWallah plans to introduce live batches in 12 Indic languages during the next academic year.
The proposed expansion will use AI-powered translation to make educational content available across different language markets.
Management also indicated that its expansion in South India would be organic rather than acquisition-led. The region contributed 9% of the company’s H1 FY27 revenue.
3. PhysicsWallah’s AI tutor Tuto moves towards paid monetisation
PhysicsWallah is also experimenting with AI-powered personalised tutoring through its Tuto product, although the commercial model is still being developed.
During the earnings call, management disclosed that approximately 4,000 students had used Tuto, accumulating more than 5,000 learning hours.
The company said its delivery cost was below ₹20 per tutoring hour. Management also discussed the possibility of pricing the product at approximately twice the average collection per user (ACPU) of its online batches.
4. PhysicsWallah is reducing its dependence on JEE and NEET preparation
PhysicsWallah’s enrolment mix indicates that its education business is becoming less concentrated around traditional engineering and medical entrance examinations.
Categories outside JEE and NEET accounted for 73.8% of H1 FY27 online enrolments, compared with 64.8% in the corresponding period last year.
The Boards and Common University Entrance Test (CUET) category recorded 130% enrolment growth during the period.
Its Skills segment, which includes Earners, registered a much sharper expansion, growing 10.3 times to 1.69 lakh enrolments.
Management described these categories as important contributors in offsetting weakness in the NEET segment.
5. PhysicsWallah explores combining university degrees with competitive exam preparation
PhysicsWallah is also considering a broader education model that combines formal university degrees with competitive examination preparation and employability-focused programmes.
During the earnings call, management discussed a proposed digital university that could offer integrated learning pathways.
The examples shared included BCom programmes combined with Chartered Accountancy (CA) preparation, BA programmes alongside Union Public Service Commission (UPSC) preparation, and university degrees integrated with courses offered through PW Skills.
The proposed model would allow students to pursue formal academic qualifications while preparing for competitive examinations or acquiring professional skills.
Management indicated that the admission cycle for the proposed initiative would begin in July 2027. However, detailed business plans were yet to be disclosed during the earnings call.
The strategy could extend PhysicsWallah’s relationship with students beyond individual entrance examinations or short-term courses, potentially creating a longer education pathway covering school-level learning, university education and employment-oriented skills.
However, the proposed digital university model will need to meet applicable regulatory requirements.
The University Grants Commission’s (UGC) published guidelines on pursuing two academic programmes simultaneously permit specified combinations of physical and online or distance-learning programmes, subject to the prescribed conditions and recognition requirements.
These guidelines do not, by themselves, establish that every proposed programme under PhysicsWallah’s digital university has received the necessary approvals.
The university’s regulatory status, degree-awarding arrangements, course-level approvals and eligibility requirements will therefore be important details to watch as the company moves towards its proposed July 2027 admission cycle.
6. PhysicsWallah transfers its student loan book to Auxilo in a ₹96 crore transaction
PhysicsWallah is changing the way it provides financial support to students by moving away from directly carrying its student loan portfolio.
During the earnings call, management disclosed that FinZ, its lending-related entity, signed an assignment deed on October 3, 2026, under which its entire loan book was sold to Auxilo Finserve for ₹96 crore.
Going forward, student loans will be offered through partnerships with regulated third-party non-banking financial companies (NBFCs).
Management said FinZ would continue to remain an RBI-registered NBFC until its closure process is completed, subject to approval from the Reserve Bank of India.
