Ladies and gentlemen, good day, welcome PhysicsWallah Limited q3 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Joining us today to discuss earnings for the third quarter and nine months ended 31st December, 2025, are Mr. Prateek Maheshwari, Full-Time Director, and Mr. Amit Sachdeva, CFO. The results and shareholder letters that have been uploaded to the stock exchanges are available on the company's investor relations website. Before we begin, I would like to remind you that certain statements made on this call may be forward-looking in nature, should be viewed in conjunction with the risk factors disclosed in the company's filing. I now hand the conference over to Mr. Prateek Maheshwari PhysicsWallah Limited. thank you, over to you, Mr. Prateek. Hello, everyone. Prateek Maheshwari this side. A very warm welcome to all participants here. I would like to give a brief introduction about Physics Wallah. A lot of attendees on this call might be new. Physics Wallah started as a YouTube channel back in 2016 by Alakh Pandey, and in 2020, became India's largest YouTube channel, and that's where our monetization journey started. Company formation happened in 2020, with a very unique business model, where we are teaching for everything for free on internet, across now 250 YouTube channels. That gives us a very strong social media presence, and that gives us a very strong top of the funnel. The model is very unique in nature, where we teach for free on internet and we launch our scheduled live classes, batches on our mobile application for various exams and degrees. Currently now covering 40 + exam and degrees, right from JEE entrance exams, NEET entrance exams to UPSC level. This is our brief journey. Model is quite unique in nature, where we call it as a Zero CAPEX model. Essentially, we teach for free on internet, and that's how we get traffic on our mobile application. Currently, having 3.4 million daily active users on our mobile app and getting engaged for 106 minutes on a daily average basis. This is a quick, brief journey introduction. Back in 2022, we started our offline learning centers as well. Currently operating more than 300 offline learning centers. Our offline model is also quite unique in its nature. It's tech-enabled offline learning centers, which we have expanded. This is essentially to cater a certain section of the students who are distracted in online mode of learning, and they their learning outcomes are better in offline mode of learning. Our offline is just part of our online strategy, where 93% of the audience are studying in online mode of learning. 7% of our total learner base comes in our offline mode of learning. Wherever we became number one in terms of number of students, we start our offline learning centers as well. This is a brief journey and a model explanation. Along with that, we have created a great innovative culture in the company. You know, if you ever get a chance to come to Noida, we would love to host you. There are a lot of entrepreneur energy on the floor and a lot of innovations which is happening at this point of time. Company stands for a vision and a mission that we want to make education affordable for every Indian household. Highest quality education, it should either be free or it should be affordable. That is the vision which we are carrying. Along with that, we want to become a lifelong learning partner of the students. This is something, a motto which all of us are living here, and thank you so much for your continued support and showing trust on us. Together, we are creating a great impact. The students who had never access to good quality structural learning, are now able to pay, able to track, JEE, NEET, UPSC, kind of world's largest and toughest examination. We are empowering India, which was underserved, and now, it is creating the equal access and opportunities to students out there. Thank you so much. Handing over to Amit. Thank you, Prateek, sir. Good evening, everyone. Thank you all for taking the time out to join the Q3 earnings call for Physics Wallah. We are overall very happy with the strong Q3 quarter results. We believe that the education opportunity in India remains significant. I'll take here a few minutes just emphasizing the results that we have published. Overall, revenue growth remained robust in Q3 FY 2026, with total revenue from operations reaching INR 1,082 crores, 34% revenue increase year-over-year. Pre-interest EBITDA of INR 218 crores, translating to 20.2% margin. PAT of INR 102 crores, equivalent of 9%. This is in spite of the INR 23 crore of one-time expense that we booked in this quarter, related to, you know, the changes in the labor code and IPO expenses, which we just concluded on 18th of November. In terms of the overall performance for nine months, we are happy to, you know, report that the growth came very strong in the overall nine months performance as well. Revenue was clocked at INR 2,980 crore, 31% year-over-year increase, surpassed the full year revenue of last year of INR 2,886 crore. Pre-interest EBITDA was closed at INR 291 crore against INR 233 crore for last year. You know, for the full year, in terms of full year, nine months, we closed at a PAT of INR 45 crores, even in spite of the one-time adjustments of INR 37 crores for the nine months. In terms of a breakup of our online and offline segment, our online segment grew at, now contributes almost like 51% and grew at 31% year-over-year. Offline grew 26% year-over-year at 46%. The proportion of offline is now at 46%, and other contributes 3%. Like we mentioned, in the last earnings call as well, our playbook is to build communities and continue to increase our share of overall online revenue. That is the focus, you know, for us going forward, and I'll talk about some of the new categories that we are building in the online segment that will help us get to a higher share in the online segment. In terms of the overall cost initiatives, the direct cost gave us a leverage of almost like 2.8% year-over-year, obviously, due to all the cost reduction initiatives that we ran, especially around the consultants and the professional fees. Our employee costs were higher, you know, including ESOP expenses. Our ESOP expenses now are at INR 125 crores for nine months, against the INR 73 for last year, largely due to the valuation impact on the new ESOPs that we issued. Secondly, in terms of the new categories that we are now starting to invest, which I will talk about in detail, you know, in the latter half of the call. Also, like we mentioned last quarter, I think our marketing spends, the pattern of marketing spends was changed, where we took a very conscious call of spending higher in the initial, you know, quarters, rather than spreading it across over the year, which was the case in the last financial year. Hence, we see significant leverage of those marketing spends to come, both in this quarter and the next quarter. Our marketing spends dropped by almost like INR 20 crores in this quarter, and we expect a significant, you know, synergies coming in from the Q4 of last year to Q4 of this year. Moving on, in terms of our treasury, our treasury now stands at INR 5,000 crores, post our IPO of INR 3,100 crores, which was the fresh issue that we did. We generated almost INR 600 crores from cash flow from operations in the first nine months. In terms of our capital allocation, like we have put in, in the shareholder letter, we will be allocating, you know, cash and capital on four key areas. The first is the offline expansion, like we put it in the use of proceeds on the RTP. We will continue to invest in opening centers. We are looking at 70 centers next year with an outlay of INR 200 crores. Inorganic opportunities, as and when the inorganic opportunities arise, we will, you know, continue to invest into that. There is a certain amount that we were in this, we raised as GCP and M&A, unannounced M&A as part of our IPO proceeds. As and when, you know, such opportunity arise, we're gonna look at it. Third is focused investments in K-12 platform. As you would have seen, you know, we actually acquired Tender Heart, we are now partnering with Tender Heart, we find ourselves in a very leading position to now, you know, create a quality K-12 platform. We'll again talk about this in detail. Some of these opportunities will keep on arising, we will allocate, you know, capital as part of the next year's planning exercise. As of now, we have invested INR 400 crores in our own company to drive some of that K-12 platform investments that we will do. The last one is AI. I think, this is an ongoing investment, both in terms of people as well as the new products that we will be working on. We'll talk about PW Talks, we'll talk about Gyani and some of the other AI initiatives, you know, that we have listed in the shareholder letter as well, and we see a significant leverage coming in from this one as well. Like I earlier said, there's a renewed focus on schools and K-12 platforms. Our existing K-12 platform currently supports 3 schools, and this is outside the SIP program that we run. Under the Vidyapeeth program, it's now almost touches 25,000-30,000 kids out there. This will be in addition to that. Overall, I think our idea coming in from the K-12 platform will be to teach at least 10,000-11,000 kids from a K-12 platform perspective. The central teams are now within PW, starting to work and sanitize and streamline operations and academics and all synergies associated with the respective K-12 platform. Moving on to the performance of our acquisitions. We are extremely bullish about the Sarthi partnership and acquisition that we did last quarter in UPSC practice. On like-to-like basis, Sarthi doubled its revenue for nine months for this year as compared to last year. This quarter, Sarthi reported revenues of INR 22 crores and a bit of INR 15 crores. This is what we consolidated in our books. We can now surely say that our overall UPSC practice is now the market leader in terms of the overall, you know, all our competitions as well. Utkarsh Classes had a great year in reimagining the entire state exams business. They reported 6% free and distributor against a negative for last year, and we will see significant amounts of cross-leverage continue to come in that business. Also in Xylem, our tech square business in Kerala that has been growing. This year, they will close the year roughly around INR 330-INR 340 crores of revenue top line. When we bought the acquisition, I think they were INR 90 crores in top line. We opened 13 new centers in Xylem, supplementing our vernacular reach in southern states, and we see, you know, helping us to build our vision of a formidable player in the southern part of India as well. Like I said, on the AI initiative, I think it's been mentioned in question 10 of the shareholders letter in a very detailed and certain way. We find ourselves significantly ahead of the AI initiatives at PW. Most of us would have seen the recent announcement about Gemini entering into mock testing, and that actually validates our investments that we did in Aryabhata. We have done a detailed press release around Aryabhata as well. We now, you know, consciously are investing in AI tech talent. Our overall tech spend, you know, because of the scale that we have grown last year, we see almost like a percentage leverage on the tech spend, in spite of our AI pod cost of the second product team going up by 40% from last year. There are three additional categories now this time we have reported. We used to report 13 categories, but now, we have three new categories that crossed the annual selections of INR 10 crores. That is Class, JEE Main & PG and IIT JAM. These three categories put together this year for the first nine months, have contributed INR 32 crores, and we will continue to invest in these new categories to actually build, you know, to get them to the goodness that we've seen in our earlier categories. The second category that we wanted to talk about today are state boards. There are almost like INR 6 crores, you know, kids studying in state board exams across India. This vertical was launched in June 2025, and we have scaled to 175,000 paid learners with a revenue of INR 22 crores for the first nine months. I think we've talked about this in the last earnings call as well. What we feel is this is going to be the category that will actually give us the goodness of, you know, the JEE Main scale, math scale that we have seen in those categories, the early categories. While we started with the, you know, five or six states, you will see a roadmap of, you know, the next states that we are going into as part of the shareholder letter. The third key category online expansion that we are seeing is on the vernacular side. We started batches in five regional languages and enrolled 94,000 paid students in the first nine months with a revenue of INR 24 crores. Again, we will replicate the same PW book playbook, which we have grown our community to almost like 2.2 million subscribers across 13 regional YT channels. That's the overall, you know, financial and business overview. We can now open the forum for any questions that you can take. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star one on your touchtone telephone. If you wish to remove yourself from the question queue, you will press star two. Participants, I request that you use handset for asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Manish Adukia with Goldman Sachs. Please go ahead. Manish Adukia, please go ahead with the question. Oh, sorry. Hi, good afternoon. Thanks for taking my questions. My first question is on that K-12 foray that you discussed extensively in the opening remarks. Few questions. One, if you were to take a slightly longer term view, maybe 3 - 5 years, how should we think about the potential for how much this could add to your revenues or revenue growth? How should we think about the margin profile of the business? Is there like a upper limit in terms of how much capital you may allocate to this business beyond what you already talked about? Maybe a related question to that also is, what drove this decision? K-12 is a large segment, but we've historically talked about the large headroom for growth in your core exam categories that you operate in, whether it's in online or offline, it's also early stage. Given there is, like, a lot of headroom in your test prep, online and offline, why the need to foray into, let's say, K-12 school segment, just get your thoughts on this? Thank you. Yeah, Manish, I'll take it up. Thank you for bringing this question. Amit has briefly talked about it in his starting address. See, if you see Test Prep as a market, because there are about INR 6 crore students at this point of time, which is growing at a 13%-15% target. We K-12 as a market, na, it's four times bigger than a Test Prep as a market. It's a much bigger market. If we benchmark against a mature economy, then China is a perfect example, because their demographics are same as ours. If India is JEE Main, then they have the Gaokao. There, 15 years ago, Test Prep market was big, but currently, K-12 is a bigger market there. In the K-12 market, in China, both online and offline players are there. We also, to address the K-12 market, 18 months before, almost 18 - 24 months before, were doing streaming. The online playbook, which is addressing our K-12 market, that is a Curious Junior product. I think in this audience, there will be many people who have small children, who are from grade 3 to 10, Curious Junior is a product you guys should use it. It's a alternate to tuition. It's a online tuition platform, which enhances your outcomes in school end exams. Curious Junior product is growing at a very rapid rate, almost 100% improvement in terms of EBITDA and enrollment we have done, and we will continue to grow with the same rate in upcoming time. That makes us the largest online tuition player as well, with the brand name of Curious Junior. Similarly, we had seen another opportunity, which was to run a K12 schools management company. Our first initiative was two years before, when we started in Gurukulam, Gurgaon and Varanasi. Currently we, our school management company operates three schools. One is out of Indore, another is Gurgaon, third is Varanasi. School is a bottomless market. It's a large opportunity for us, and we have seen this opportunity. From a parent side, there's a great affinity because they want to get enrolled in a Test Prep national brand-centric school. Until now, the opportunity which is there, is not very organized. This is a very big market opportunity, and we have already have a success story in Varanasi, where we have turned around a brownfield school into a school full of 1,200 kids at this point of time, in just 18 months of time. This playbook is getting mature and mature, and this aligns with our overall mission to become a lifelong learning partner of the students. As well as, if we talk about Test Prep, we are already providing grades 3 - 12, up to UPSC. To run any good online or offline education business, you have to take care of teacher ratings, learning outcomes, student attendance, repeat rates. Basic principles remain the same. The K-12 schools, we have opened three schools. We are starting eight more schools, four brownfield, four greenfield, as well as we have done a Tender Heart, Ranchi, partnership, where we have taken the management control of the school. This is overall, you know, overall scheme of things, this is not even contributing half a percent of revenue at this point of time, but in the long run, it will contribute a good amount of EBITDA. The schools we are also starting, we are doing a fair amount of Test Prep education in them, so that the children's formative years, their JEE and NEET preparation is done. By the time we enroll our students in grade 11, the damage is already done. Some deficits are so deep that it becomes quite difficult to bring out their outcomes. If we look at the overall specialized preparation for medical and engineering entrance, there is a need for it because our schooling system haven't lived up to expectation of these exams. The entire coaching is also a bad schooling in the country. We want to fix it at a root, that is why we have taken some baby steps in this direction. This is. Long term, within 3 - 5 years, this will become a significant EBITDA, a noticeable, significant EBITDA by FY 2029, 2030, in upcoming years, is what I can say to you. Manish, just to add. Right. in terms of the capital allocation, we, you know, we allocated INR 400 crores in our school management company, you know, probably a couple of months back. That is the, you know, allocated capital right now for building the K-12 platform. I think what has significantly turned around for us, like Prateek mentioned two things: First, you know, the nuances around the school management, which we've been able to work with the Varanasi school, has given us some level of, you know, how the entire economics, you know, of school management should run, like, that has given us a little confidence. Secondly, I think what Tender Heart partnership has done, is that lot of good K-12 platforms have started reaching out to us, and they want to work with Physics Wallah just in terms of the, you know, pedagogy that we bring on the table, you know. Right now, that is the allocation, but once we go through the planning cycle for next year, that is when we will probably take a, you know, refresh view of where we are right now, and the ambition, like Prateek mentioned, where we want to be in 2029, 2030, because this is going to be a long-term story for the next, you know, at least. in few, at least 4, 5 years, when we start delivering. We have both the models here, Pratik, here. That we have a asset-like model with the name of School Integrated Programme, where we have partnered with 50 such schools. We'll teach almost 25,000, or will generate almost INR 25 crores of top line through that model also. Along with that, we have a complete management control over Tender Heart and as well as some greenfield and brownfield K-12 schools coming up. As I mentioned, K-12 is going to be a larger business than a test prep business down the line five years, is what I imagine. If you benchmark any company in China, be it New Oriental, EDU, all are listed, their K-12 business is larger than their test prep business. As I see, down the line five years forward. Very helpful. My second question would be, maybe a related question. You explained the opportunity in K-12, and when you think about a few markets of education, which is test prep, where you have been, now you're entering K-12, and you have your own IOI as well, which is of course small right now. Would you also then consider entering formal education in undergrad and postgrad as well? Or that's something which is not a part of the plan over the next three, five years? See, formal education, if you see, 70% of the students that we are teaching at this point of time, are twice plus students, which have already passed grade 12. If you see, do I have the best faculty in India who is teaching computer science? Yes, we do have. Do I have the best faculty in terms of civil engineering, in terms of mechanical engineering? From a GATE category perspective, I'm already number 1 player in terms of all engineering schemes, producing almost back-to-back rank ones in past two years consecutively. If you say, do I have the best faculty of UPSC Humanities, all 19 subjects? Yes, I do have. UPSC as a business also has grown more than 100% in first nine months. Every one in the three IAS and three IPS is being produced by us at this point of time. Formal education, but still, still we have GATE, UPSC, CAT, CA, inside the degrees, significant number of students who are studying. Formal education, the right way of entering is to start it 100% online digital university. gap college exams, test preparation. When these three things are merged, it will add a lot of value to the students' lives. existing IITs, IIMs partnership courses under the brand name of Vedanti. As well as we are trying to set up India's 1st digital university. We are in talks with various authorities, and we are finding a way to create value for the students there as well. Very clear. Just last question on, thanks for the details you put here on student breakup, et cetera. I noticed that even your NEET and JEE student growth or enrollment growth has now maybe slowed down to around low single digits. Of course, other categories continue to do really, really well. Is that something that maybe we should extrapolate to other categories as well? That, you know, as you enter categories, you see some very strong growth for the first 3, 4 years, over time, these categories saturate, and then they start growing slower. I'm just trying to think that, of course, you talked about boards as a larger opportunity- Yes. -but When I think about the interplay of these categories, where I'm guessing JEE are very profitable for you, but the other ones are in the early stages. How should I think about, you know, just the growth dynamics of these various categories and the interplay of that to profitability? JEE, we have seen a great traction in terms of the southern part of the country. Their YouTube channels and enrollments are picking up very fast, since the denominator is very high in terms of number of students in North India, penetration is very high, that's why the overall growth is only 3%-4%. If you see, there is a good amount of shift of the students from JEE to board exams as well. You know, earlier we never had offerings like state boards as exams, as well as CBSE grade 11, 10, 12. If you see the cohort of grade 11 and 12 put together, still you will see a double-digit growth, a higher double-digit teen growth, for sure. The UPSC as a category is growing at 100% revenue run rate for first nine months. The similar trends we have seen in commerce as a category, CA as a category. The Hindi heartland, the North India, where we can see that, like, you know, we have a decent amount of penetration, but the entire southern part of the country is the headroom left for our early exam categories, JEE and NEET. All our new exam categories are, anyways, growing at a double digit growth rate. Very helpful. Thank you so much for taking my questions. All the best. Thank you. Thank you. Next question comes from the line of Karan Malhotra with Axis Capital. Yeah, hi. Thanks for the opportunity. Just I have a couple of questions and some follow-up on this strategy from K-12. See, in, just wanted to get an understanding, what is the right to win here, right? Because in online, offline, we have this, you know, to find the top of the funnel, and that is sort of helping us, you know, gain a disproportionate advantage in the online space and to extending offline. This is a completely different kind of a business, right? Just wanted to get some sense on our right to win over here. I'll quickly answer this question. We have students enrolled in our Vidyapeeth, which is brick-and-mortar physical setup, technology-enabled, right from grade 8 onwards. Grade 8, 9, 10th, 11th, 12th, are already being covered in existing Vidyapeeth setup. If you see the journey of the students, you know, they have to go to schools in the morning and coaching in the evening, that is double workload. If you talk to any parent, they want integrated setup, both test prep and school education should happen at 1 go. It's a great opportunity, that explains my right to win. If I can create value for a grade 8th student, grade 9th student and 10th student in a Vidyapeeth, I can create a similar value in terms of school environment. Second thing is, from a brand perspective, other than the parents, instead of sending it to a local, hyper local school, say, whether it is compared to a national brand, which is, which curriculums, pedagogy, data-driven technology, is giving more assurance for their kids to have the right foundation to prepare for IIT-JEE, NEET, as well as UPSC, and all the test prep. It is the test prep branded school is what, what the playbook is. Online pedagogy about current to Curious Junior starts from grade three. Our online Mega batches, which are affordable online Mega batches, to our grade six already starts with that. We have all these curriculums in place, pedagogy in place, teacher training, and technology in place. I think we have all the right to win. For example, what is my competition here? My competition is a local non-tech-led school, where the curriculum and the standard practices are not there. Even this is much more easier market to win and create brand, is what we have seen in our initial interventions. Got it. I think there's a follow-up. You know, you mentioned that in the next 4-5 years, you would think that, you know, K-12 will become larger than, say, test prep. You know, just sort of focus on the offline business, because the offline business will also sort of keep growing. There's some. Right now, there's 400 schools being allocated. Suppose, I assume, say, 1,000 students per school, right? Even to get to, like, say, INR 1 lakh students, you know, it's probably 1,000, say 100 schools, right? I'm just trying to understand how big is the potential capital allocation for this segment, say, if you were to think from a 4-5 years perspective, and how do we sort of think about it? When we think, when I think K-12, it's broadly classified into schools as well as online, which is much more larger number of students. For example, Curious Junior, we have 30,000 students. School Integrated Programme, which is offline, existing schools, 5,000 students and INR 25 crores of top line. The school, the Tender Heart School, 5,500 students existing here. This is a broader vision for the company. At this point of time, what is the significance of this? Overall, INR 4,000 crores of top line, the contribution of this initiative is less than 1% at this point of time, if I add Curious Junior, SIP, and the existing schools put together. The playbook is the same to grow online in this segment significantly, to start a hyper local school. Of course, to reach to 1 lakh students, we have to have 100 and more schools in place. At the same time, if you see the real economics of this business, students take admission in grade 1, grade first, and it is there till grade 12th. It's a grade LTV business as well. At a steady state, we have seen schools making 25%-35% margin business, we will integrate test prep into the schools. That is a great synergy, because by doing it, we could able to charge, right amount of fees, and we could able to save time for the students and create value within the school premises itself. Did I answer your question? Again, do you have any follow-up question on this? No, ma'am. This is good. Thank you so much. Thank you. Bye. Thank you. Next question comes from the line of Ashok Pal with JM Financial. Please go ahead. Hi, thanks for the opportunity. I just wanted to understand the state of your marketing spend. How much of it is happening to drive traffic on the online side, and then these new initiatives that you're talking about, the Teachwell and others, how do you distribute that? A related question to that is, like, you mentioned that you have started spreading out the investment on marketing over the entire year. Does that mean that your for Q marketing spends this year will be significantly lower in percentage terms or absolute terms versus the previous year? I'll address the first part of the question, and Amit will take the second part. In terms of my early exam categories, engineering entrance and medical entrance, the spends are less than 2%-3%. It's just the awareness is spent because we already have a good position in the Hindi heartland in our early exam categories. Couple of my new exam categories, the marketing spend is to generate awareness, is to generate top of the funnel signups and to reach to a critical number of students, where you need not to spend further marketing $ to have a top of the funnel, then the word-of-mouth starts kicking in, then the student keeps on leading, adding the new students. To answer your question, the spend in the early exam category is 2%-3%, and then your exam category is slightly more. As well as the spend is going in the southern part of country to generate awareness, to have enrollment. In terms of leverage coming out, Amit will take it up. I think, first, just two points that Prateek had mentioned and summarized very well. Our marketing spends, if you look at from any other, you know, education company, are almost like 20%-25% of any other player who's in the online business. You know, I think the reason why I spend, and we typically don't call them marketing spends, I think these are more cost of distribution for us, because our playbook is largely community-led playbook, you know? I think, like, you mentioned right at the start of the call, is that you create communities on social media, on YouTube, start, you know, putting in content out there, then there is generation that happens there. Students, you know, start appreciating the content being put up there, because these are like, online teachers who are, you know, really good at their subject matter knowledge. Student comes onto the app, still has the ability to consume free content, and then depending on all the value adds that he sees in terms of buying a batch, which is our core product, he ends up buying a batch, and that is how the entire, you know, monetization, channel works for us, you know. In terms of like, you know, the point that earlier you were making earlier, this is the big chunk of our distancing. The point I was earlier making in terms of leverage, is our last year marketing spends were INR 276 crores, which was roughly 9.6% of the last year revenue. The nine months number for, you know, this year is INR 266 crores, which is roughly 8.9%. The corresponding number for this nine months last year was INR 183 crores, you know? If you look at it, the point I was making in terms of marketing spends lower for us, this was in terms of the marketing spend as compared to last quarter. On a full year basis, we are anticipating that we will significantly be lower than the 9.6% that we spent last year. Two reasons for it: like I said, I think the incremental spends that we did in the first Q1 and Q2, that actually gave us a high ROI. The reason why the marketing spends will not be lower this quarter than as compared to the quarter, you know, Q3 of this year, is largely because of the refresh business and the student acquisition that starts happening for the next academic session. What we believe, anything between 8.5% is where we will land the full year marketing spend for this year. Which is significantly lower than 9.6% of the last year. Can we take to the next question? Yep. Mr. Patoke, are you done with the question? We have no response from the line of Mr. Patoke. We'll move to the next. The next question comes from the line of Pratyush Kamal with InCred Equity. Please go ahead. Hey. Hi, Amit and Prateek. Congratulations on the good set of numbers first. There are two things which was on my mind when I saw that, you know, you are getting into the acquisition of the school. Definitely, we've seen a lot of private equity deals happening in the last couple of years and in the schools. Again, the question comes is that, which type of schools are you actually catering to? Are you getting into the premium, you know, schools, or you are getting into the market of economy or sub-economy schools? That is the 1 question, because again, the margins, the better margin, the PAT margin, totally, you know, definitely is relevant and gets impacted on the kind of schools you are operating in. Second question is regarding, you know, what kind of margins or sector which you see coming out from these schools? Do you also see that these schools would be a gateway for the add-on services which you would be providing in terms of, you know, online test, of, you know, giving the online test prep, you know, if coaching or something like that for the, for IIT or Sunny, et cetera, which you have already talked about? Is these schools-. Not just the offline center for, you know, for gathering new people, for gathering or getting new K-12 students, but is it also a go-to-market strategy for you in terms of getting the access of these people and getting the access of the students and getting them enrolled in your, you know, test prep division, in the online mode? How do you see the plans coming up and ramping up? I'll, in the interest of time, I'll quickly answer your question. Yes, first is the price point for the students. Anywhere between INR 70,000 as annual fees to INR 1.5 lakh, depends on the metro, Tier 1, Tier 2, Tier 3 cities. Essentially, these are the CBSE schools, is what the price point is. The margin can vary in between 20%-40%, depends whether you own the property or it's a lease property. Coming back to the synergy part, which is very important. See, a school-going kid, like, the positioning is above average or premium in between. The synergy between test prep and school is very organic. Yeah. Class 9 is the year where the students start preparing for their medical and engineering entrance exam. Okay. Grade 11, they become quite serious and either they opt out of the schooling, opt for a dummy schooling system, or they continue to go to school in the morning time and stretch for their specialized preparation in the second half of the day. Existing school ecosystem kids will get benefited with our test prep courses. We can leap on their business. For example, a commerce kid who's going in 11th grade. Yeah. start his fee preparation journey in grade 11th itself. For a UPSC aspirant. Mm-hmm. The real foundation we can start building from grade 11th onward, grade 9 onwards only. It is a test prep integration. The question whether it will fuel our existing Vidyapeeth center? Partially, yes. If you see Ranchi as a city where we have done center half, we are number one in offline, now we are number one in the schooling. That is a number one position in terms of one city, it is a state capital in terms of coaching, as well as in terms of school prep. That gives you a lot of cross-synergy and strength. Yeah, there is a definitely a great synergy with existing Vidyapeeth as an ecosystem. Got it. When you say, you know, that margin could be 18%-40%, essentially I totally understand that. Mr. Kamal, sorry for interrupting. Your voice is breaking. Yes, please. Mr. Kamal, your voice is breaking. Hello? I'm still now. Hello, it's still breaking. Can you come a little closer to the mic and speak? Hello. Hello. We've lost the line of Mr. Kamal. We'll move to the next, that is, Mr. Shivam from Middlebank Equities. Please go ahead. Hi. Thank you. Thank you for the opportunity. My first question is that, in the last conf call, you mentioned that you will be disclosing EBITDA separately for offline and online, from the next- Mm-hmm. -financial year. The school thing that is coming up, so EBITDA offline included. What is greenfield meant here? Are we going to be CapEx heavy here? Sir, online and offline, we segmental reporting, 1st of April, or school will not be a part of our offline business, it will be part of our other business at this point of time. Greenfield school, land and property is a built-to-suit model, where owner is constructing the school as per our need, and we are leasing out these properties for nine years. There are four such schools will be coming, and it's completely asset-light. In fact, like, for the next financial year, it will be a very small portion of our overall bottom line and top line. Thank you. Mr. Shivam, please return the queue for more questions. Please restrict yourself to one question per participant. The next question comes from the line of Avinash Kumar with the Bridge to Capital. Please go ahead. Thank you. Sir, my question is on your AI capabilities. First of all, how is your AI capabilities different from the other players? The follow-up is, there is Gemini, OpenAI, they are coming into education. How confident are you that you'll be able to outperform their models when it comes to education? See, one thing which makes us very different is, the AI tools we have made, Alakh AI, AI Guru, AI Grader, all these tools are completely designed for Indian test prep kids. It is completely designed by our own in-house proprietary data, so millions of students daily are coming and they are asking you questions. का डाउट है, as well as उनकी लर्निंगिंग बिहेवियर और पैटर्न से जो data generate होता है, उन सारे बिहेवियर्स और data points से हमने fine-tune और एक RAG layer implement की है। As well as अगर आप देखेंगे तो now AI is becoming an integral part of the student life cycle. AI लर्निंगिंग को hyper-personalize कर दिया है। बच्चों की life के अंदर बहुत ज्यादा value addition हुआ है, as well as teachers की life में भी great value addition हुआ है। With the help of AI, teachers are now more efficient. AI is designing PPT, AI is designing question paper, AI is evaluating answer sheet of the kids. फिर teachers की life cycle के अंदर भी AI को बहुत खूबसूरती से integrate किया है। Quickly on your point on Gemini and other folks coming in education. See education is a very niche use case, a guru cannot go wrong. अगर आप हमारे models की accuracy देखेंगे तो it is better than Gemini and the existing GPT because it operates on a RAG layer, which is fine-tune layer on top of this large language model, that gives you a great opportunity. हमने हमारे खुद के small language model भी launch किए हैं। RF as well as concept clearance के लिए एक और small language model आ रहा है। इन सारे models की cost जो है वो Gemini और GPT से 1/10 है। We are among the top players in terms of in terms of AI in education and we continue to be bullish about it and the way the ecosystem is developing, we see this is a great, great opportunity. थैंक यू। मिस्टर आर्य प्लीज रिटर्न टू यू फॉर मोर क्वेश्चन। नेक्स्ट क्वेश्चन ऑन द लाइन ऑफ आयुषी विद अर्थ नेटी कैपिटल, प्लीज गो अहेड। हेलो, हाई टीम! अ- आई जस्ट हैड टू क्वेश्चन अराउंड इट, सो विद द रीसेंट इनकॉरपोरेशन ऑफ हॉस्टल सर्विसेज एंडिटी, हाउ डू यू इंटेंड टू इंटीग्रेट एंड स्केल इट अक्रॉस योर एक्जिस्टिंग स्टूडेंट इकोसिस्टम? एंड सेकंड क्वेश्चन इज, पीडब्ल्यू डॉग्स कैटरर सेपरेट टारगेट सिस्टम, हाउ लार्ज यू बिलीव द ऑपर्च्युनिटी फॉर पीडब्ल्यू डॉग्स, एज़ देर आर ऑलरेडी मेन एसेर डूइंग इट। हमम! या थैंक यू, मैं यू नो, आई क्विकली आंसर बोथ द क्वेश्चन। सो अबाउट द हॉस्टल एंटिटी, अ- दिस इज डिजाइन टू इंटीग्रेट अ- अ हॉस्टल बिजनेस ऑफ आवर सबसिडियरी आइलैंड, व्हिच वाज, व्हिच वाज फ्रेगमेंटेड रन इन अ- इन त्रिवेंद्रम, एज़ वेल एज़ वी हैव अ वेरी स्मॉल स्टूडेंट हाई अ- हाउसिंग अपॉर्चुनिटी एट वेरियस पार्ट्स ऑफ द कंट्री। सो दैट्स व्हाई वी थॉट दैट वी विल इंटीग्रेट द एनटायर हाउसिंग बिजनेस, व्हिच इज वेरी स्मॉल। अ- व्हिच इज अगेन, लेस देन अ परसेंट एट दिस पॉइंट ऑफ टाइम अ- इंटू अ इंडिपेंडेंट एंटिटी एंड दिस वी डोंट हैव एनी एग्रेसिव प्लान्स टू ग्रो दैट बिजनेस। दैट इज, दैट इज जस्ट टू फैसिलिटेट, कपल ऑफ स्टूडेंट एंड पेरेंट्स नीडड एंड दिस विल बी इन सम ऑफ द हॉट पॉकेट, लाइक पटना, लाइक त्रिवेंद्रम, इन इंडिया। द सेकंड व्हिच इज बहुत वेरी गुड क्वेश्चन अबाउट पीडब्ल्यू टॉक, सी अ- लेकिन हमारी जो ब्रांड है, वो हिंदी हार्टलैंड में बहुत स्ट्रांग है और वहां पर एक कॉमन प्रॉब्लम बच्चों को हमको दिखाई देती है कि इंग्लिश स्पीकिंग स्किल्स, स्पेशली गवर्नमेंट एग्जाम, स्पेशली अ- अ- जो हमारे यूपीएससी के एग्जाम, गेट के एग्जाम के बाद में जो बच्चे अपने प्रोफेशनल करियर के लिए जाते हैं, तो उनको इंग्लिश स्पीकिंग के अंदर बहुत सारी हर्डल्स अ- आती है। तो उसके लिए हमने पीडब्ल्यू टॉक, जो कि कंपलीटली सेटेलाइट टेक प्रोडक्ट है, जिसके अंदर आप एक एआई एजेंट से बात कर-करते-करते और पीडब्ल्यू के रिकॉर्डेड लेसंस, बाइक साइज लर्निंगिंग अ- के लेसंस को देखते-देखते आप इंग्लिश सीख जाते हैं। एंड दिस इनिटिएट अबाउट इटीन मंथ ओल्ड इनिशिएटिव, वी हैव नॉट टॉक अबाउट अ लॉट ऑफ दिस इनिशिएटिव इन आवर डीएसपी, बट इस साल के एंड तक ये इनिशिएटिव मिलियन डॉलर रन रेट एआरआर के ऊपर आ जाएगा अ- और इसका जो मॉनिटराइजेशन है, वो भी हमने हमारी ब्यूटी ऑफ स्टूडेंट की जर्नी के अंदर ऐप के अंदर हमने इंटीग्रेट कर रखा है। फॉर एग्जांपल, जब आप ब्लिंकिट पे या फिर वेब स्टोर के ऊपर आप कुछ परचेज करने जाते हैं, यू गेट टू सी फ्रीक्वेंटली बॉथ टुगेदर आइटम्स एंड यू ऐड दो आइटम्स इन द कार्ट। इसी तरीके से अगर कोई गवर्नमेंट एग्जाम की प्रिपरेशन कर रहा है और वो कोई बैग को परचेज करने जा रहा है तो वो अ- जो है इंग्लिश स्पीकिंग अ- कोर्स को भी इसके साथ में ऐड कर सकता है। एस वेल एज़ हमने डिजिटल मार्केटिंग एफर्ट्स भी इसके ऊपर डाल करके टॉप ऑफ द फनल अ- जो हमारा यूट्यूब इकोसिस्टम है, उसको भी लेवरेज करेंगे। बट दिस इज अ असेस्ट, असिस्टेंट लर्निंगिंग एनवायरनमेंट एंड इफ यू सी द बिगेस्ट कंपनी ऑफ द वर्ल्ड इन एजुकेशन एट दिस पॉइंट ऑफ टाइम, जो कि ड्यूलिंगो है और इंडिया के अंदर मैं देखता हूं कि इट्स अ लार्ज अपॉर्चुनिटी, बिकॉज़ आई एम इन हिंदी हार्टलैंड। सो इट, विद द वेरी स्मॉल टीम ऑफ टेन पीपल, विद द, विद द फ्रैक्शन ऑफ फ्यू लाख रूपीस ऑफ इन्वेस्टमेंट अ- इन कंटेंट, हमने ये क्रिएट किया और मतलब ऑलमोस्ट अ- एनुअल रन रेट मिलियन डॉलर दिस मंथ, दिस ईयर के एंड तक आ जाएगी। अ- हैप्पी फर्स्ट टेन थाउजेंड स्टूडेंट्स हमने इसके सर्व किए तो वी डू थिंग दिस इज अ ग्रेट अपॉर्चुनिटी, एस्पेशली आफ्टर एआई पीक के बाद में। मतलब like यू नो इंग्लिश सीखने का सिर्फ एक ही तरीका है कि आपको इंग्लिश बोलनी पड़ेगी। आई वाज अ हिंदी मीडियम स्टूडेंट, बट अ... माय फर्स्ट जॉब वाज इन Chennai. जब वहां पे ना किसी को हिंदी आती थी, ना मुझे इंग्लिश आती थी। That's how I learning English and this. We have benchmark global standard, PW Talks का एप्लीकेशन आप लोग भी यूज करें, अपने आपके डोमेस्टिक हेल्प को भी दें. We have टीम की, टीम से होने के डेडीकेटेड एफर्ट्स के बाद में, पीपल के लोगों के स्पोकन इंग्लिश के एफर्ट्स जो है, एक्चुअली आउटकम के अंदर ट्रांसलेट हो रहे हैं. Although, you know, we are bullish about it, but still it's, you know, very small percentage of revenue at this point of time. If, if I see globally, Speak is a unicorn company, which helps Spanish as well as Korean people to talk in English, as well as Duolingo is another example. It's a large opportunity in the long run. Thank you. Mr. Aich, please join the queue for more questions. Next question comes from the line of Yashika Pancholi with Centrum. Please go ahead. Hello. Hi, can you hear me? Yeah. Hi. Hi, Prateek. Hi, Amit. Hi, Ankit. Congratulations, the results are fantastic. Immense potential in the company. It's great. I just want to hear a little bit about going forward in the next five years of 5-7 years. In the K-12, what are we looking at as far as revenue share is concerned? I know you cannot give a definite number, but even a conservative ballpark would be very helpful. K-12 is a large possibility. You know, it's a large vision for the company, and it is growing at a very rapid rate in terms of students, we are in terms of our School Integrated Programme as well as became a larger school. The right way, if you see China as a benchmark, 40% of the top line comes from K-12, and 30% from their test prep business. K-12 will become larger than test prep, is what we anticipate down the line seven years, because that growth is aligned with the domestic conversation story of the country. We do see great value addition in terms of student empowering in these formative years. I don't have an, you know, number will happen seven years down the line, but the early trend suggests that it is going in a very right direction. Thank you. Ms. Pancholi, please return to queue for more questions. Next question comes from the line of Divakar Shukla with Ambit Capital. Please go ahead. Hi, team. Congratulations on an amazing result. Like, what is the roadmap for the M&A piece of PW? Are you planning to do any M&As outside India as well? The second part to the question is, like, are you planning to do M&As in the online space only, like you just did in Sarthi, or do you intend to do it in the offline space as well? See, consolidation is one of our major thesis, why we listed and raised a good primary capital. In terms of online/offline, that's not how I look at these businesses. The education businesses, key quality, attendance, outcomes, overall student NPS, outside India, the answer is simple: No. We outside India, neither evaluate, nor acquire. We don't have bandwidth to go, you know, outside India at this point of time. In terms of within India, yes, we are evaluating both offline and online assets, and we will announce 2 M&As in the next 2 quarters as well. The thesis here is the synergies with the group. Exam categories, our target audience, that is another core thesis of the company is key. We generally acquire profitable entities. The range of the multiple we give it to these companies is anywhere between 8-12. We believe in an earn-out structure, where we don't take one short majority. We take, you know, anywhere between 25%-50% equity as a first go, and a 3 - 4 year of integration and earn-out structure for the founders. The Sarthi is the right example, as you mentioned, the very similar playbook where we want founders to run the company and transition the brand with us for upcoming 3, 4 years. We are in talks with couple of good domestic offline players, as well as we are in talks with some of pure online players like Sarthi at this point of time. Thank you. Ladies and gentlemen, that was the last question for today. For more questions, reach out directly to Physics Wallah management team. I would now like to hand the conference over to the management for closing comments. Thank you, everyone, for joining the analyst call today. I think, the number of questions that came on the K-12 platform also re-emphasizes the fact, you know, that we are thinking in the right direction. Also, you know, while, while we talked about K-12, a significant portion of our revenues, you know, still come from test prep. We grew almost like 97% CAGR for the last two years, and we will for a full year guidance, we will grow in the range of 32% to from 35% this year, with strong growth coming in both in the online as well as offline, and our commitment to continue to grow in both these segments. With this, thank you again, and we look forward to you all joining in the next analyst call. Thank you. Thank you. On behalf PhysicsWallah Limited, that concludes this conference. Thank you for joining us. You may now disconnect the line.