JPMorgan has initiated coverage on PhysicsWallah, an edtech company, with an 'Overweight' rating and a price target of ₹125, which represents a 14% upside from its current market price of ₹110. As of 11:44 AM, shares were trading at ₹109.98, reflecting a 2.7% increase. The brokerage's valuation employs a sum-of-the-parts (SOTP) approach, assigning a 30x enterprise-to-Earnings before interest, tax, depreciation, and amortisation (EV/Ebitda) multiple to its core online and hybrid test prep business, while the offline centres are valued at a lower 10x EV/Ebitda. The Indian test prep market is expected to grow at a 13% compound annual growth rate (CAGR) from FY25 to FY30, reaching $23-25 billion, with the online segment projected to expand at a sharper 29% CAGR. PhysicsWallah's affordable pricing strategy across various preparation courses positions it well in this growing market. However, JPMorgan has flagged risks such as potential student churn, high capital expenditure, and regulatory risks in the test prep sector.