Leading global investment bank Goldman Sachs has commenced its coverage of the Indian edtech major PhysicsWallah, assigning it a 'neutral' rating and setting a target price of Rs 135 per share. This move highlights the growing institutional interest in India's education technology sector.
Edtech Giant and Electronics Major Under Scanner
Analysts at Goldman Sachs identified PhysicsWallah as one of India's largest edtech platforms, noting its balanced revenue mix between online and offline segments. The firm projects a 24% compounded annual growth rate (CAGR) in revenue for the period between FY25 and FY30. This is a moderation from the 38% CAGR seen in the previous two years but remains at the mid-to-high end of the bank's India internet coverage.
The report forecasts an impressive over 80% EBITDA CAGR for PW over the same period. Analysts attribute these strong projected numbers to the company's powerful organic traffic generation, a relatively less aggressive competitive landscape in its core test-prep segments, and a pricing model that facilitates expansion into new educational categories.
However, the report also flagged a potential risk: PhysicsWallah's business model operates with a negative working capital cycle. On a positive note, Goldman Sachs predicts the company will generate free cash flow exceeding 100% of its net income starting from FY26.
Mixed Bag for Other Stocks: From 'Reduce' to 'Buy'
In other significant brokerage actions, Avendus Spark began coverage on LG Electronics India with a 'reduce' recommendation and a target of Rs 1,536. While acknowledging LG's extensive retail reach and robust in-house manufacturing as key strengths, analysts expressed concerns. They warned of potential market share erosion and revenue challenges in premium categories due to new competitors, despite a third manufacturing facility being planned for South India and exports.
Contrastingly, Nuvama Institutional Equities initiated coverage on Knowledge Marine & Engineering Works (KMEW) with a 'buy' and a lofty target of Rs 2,500. The firm is bullish on India's maritime infrastructure push. KMEW, benefiting from high entry barriers and scarce competition, commands a 50% order-win rate and delivers superior EBITDA margins of 35-40%. Its order book is diversified across dredging (43%), shipbuilding (11%), and ancillary services (46%).
Banking and Cement Sectors See Positive Action
In the cement sector, HSBC reiterated a 'buy' on Ambuja Cements with a Rs 700 target, following the board's approval to amalgamate ACC and Orient Cement into Ambuja. The consolidation, expected within a year, is seen driving operational synergies and cost savings of at least Rs 100 per tonne.
For the banking sector, Investec maintained a 'buy' on RBL Bank with a target price of Rs 430. The bank plans to use half of a proposed $3 billion infusion to retire high-cost liabilities, aiming for rating upgrades to narrow funding cost gaps. RBL expects 30% loan book growth in FY27, led by wholesale and prime housing loans. The management anticipates a one-time impact of Rs 1,500-1,700 crore due to new expected credit loss norms from April 2027, which will be partly offset by faster secured lending growth.
(Disclaimer: The recommendations and views expressed by various brokerages are their own and do not represent the views of this publication. Investors are advised to consult certified experts before making investment decisions.)
