Effect of working capital management on Company

profitability

Name:Mahesh Mahadev
Class :PGDM B
Roll No:p19195
Introduction about the company
Aircel Ltd. was an Indian mobile network operator headquartered
in Mumbai that offered voice and 2G and 3G data services. Maxis
Communications held a 74% stake and Sindya Securities and Investments held
the remaining 26%. Aircel was founded by Chinnakannan Siva Sankaran and
commenced operations in Tamil Nadu in 1999. It was once a market leader
in Tamil Nadu and had considerable presence in Odisha, Assam and North-
East telecom circles. 2G and 3G Services including voice were shut down in all
circles due to failure in merge with Reliance Communications.

Aircel was founded by Chinna Kannan Siva Sankaran from Kovilur,Cheyyar,

Tiruvannamalai and started its operations in the Tamil Nadu telecom circle in
1999. It became the leading operator in Tamil Nadu and one of the fastest
growing mobile operators in India. Malaysian telecom company Maxis
Communications bought a 74% stock in the company from Sivasankaran in 2005.
The remaining 26% stock is held by Sindya Securities and Investments promoted
by Suneeta Reddy, Managing Director of Apollo Hospitals. In 2012, as a part of
a major re-organization in its operations, the company scaled down its operations
in five telecom circles, namely Madhya
Pradesh, Gujarat, Haryana, Kerala and Punjab. In April 2015, Aircel relaunched
its service in Kerala. On 14 September 2016, Reliance Communications and
Aircel announced the merger of their mobile network operations. Following the
merger, the joint entity was expected to become India's fourth largest telecom
operator in term of consumer base and revenues. A year later, however, both the
companies called off the deal citing regulatory and legal issues.
Aircel had planned to shut down its operations in unprofitable circles including,
Gujarat, Maharashtra, Haryana, Himachal Pradesh, Madhya Pradesh and Uttar
Pradesh (West) from 30 January 2018.The Telecom Regulatory Authority of
India (TRAI) asked Aircel to report the number of subscribers who have ported
out from Aircel in these six circles. In cases, where the porting process could not
be completed TRAI has asked the reasons for it. After the failed merger deal with
Reliance, Aircel had considered merging with Bharti Airtel, whose
chairman Sunil Mittal had stated in November 2017, that Airtel "was open to
acquisition talks". As of December 2017, Aircel was under of debt of
around ₹16,000 crore (US$2.3 billion).

Aircel met with extraordinary success in the Eastern frontier circles. We pride
ourselves on customer satisfaction and managed to emerge as the market leaders
in Assam and North Eastern states within 18 months of operations. During this
period, our company gained a strong foothold in 10 circles, to provide better
access

Aircel is a pan-India 2G operator with 3G spectrum in 13 circles and is credited

with the fastest 3G roll out ever in the Indian telecom space. Aircel provides 3G
service in Andhra Pradesh, Assam, Bihar & Jharkhand, Chennai, Jammu &
Kashmir, Karnataka, Kerala, Kolkata, North East, Orissa, Punjab, Tamil Nadu,
UP East and West Bengal. As a young data led telecom player, Aircel had
constantly been at the helm of introducing innovative and value for money
products and services for its customers, be it the Aircel Pocket Internet, taking
the first step in making 3G affordable for the masses or launching revolutionary
Industry first data products aimed at fuelling Internet adoption.

Aircel offers its customers, services and products that are easy to understand and
use. All offerings are stimulating and at the same time extremely unique as Aircel
continue to re-invent itself constantly to deliver the best and most up-to-date
services. The brand instills a feeling of pride, confidence and reliance among all
stakeholders by anticipating their desires and fulfilling the same efficiently.

With our foundations deeply set on our brand vales of simplicity, creativity, trust
and excitement, we will continue to deliver superior services to our customers
and will do our best to live up to their high expectations.
Various operations of the company
Aircel had a subscriber base of over 84.93 million and was India's sixth-largest
GSM mobile service provider. Youth being our primary target segment, the
objective was to connect with them better. They looked at such associations
which present an opportunity to capture our brand ethos. These helped the
company gain visibility and recall among the youth, the primary target segment
for Aircel.
Aircel launched ‘Astro Buddy’ service which provides predictions on a host of
subjects such as Relationship, Health, Career, Finance, Family through daily
alerts to the customer’s phone – making it simple and easily accessible. The
service, powered by leading mobile internet company One97, is delivered with a
single step access for quick downloading, essentially making it available on all
data enabled devices. Aircel recorded over 5 Lac subscriptions across the country
for its service in a short span of time.It also providined daily astrology predictions
to customers through easy downloadable, interactive animated videos. This made
Aircel one of the first telecom operators to offer astrology videos as a Value
Added Service on Data, which was so far offered largely on Voice or through
SMS based services. The subscription-based service provides predictions on
video or SMS based on one’s zodiac signs/date of birth - with forecasts by
celebrated Astro buddy, Bhupesh Sharma, the lead Astro-counsellor of Nyassa
AstroCorp, an astrology consultancy.

Vision and mission

Vision
1) Enable all Indians benefit from telecom technology for improving their quality
of life.
2) Strive to make India a leader in telecom over the next decade

Mission
Create synergy amongst academia, telecom industry and government for creation
of new services/applications, generation of IPR, development of manufacturing
capability, global telecom standardization activities, and promotion of
entrepreneurship.
Address technological and managerial challenges faced by Indian Industry in
reaching all sections of society through affordable solutions, providing world
class services, and having global presence.

Strategic decision towards vision of the company

Aircel offers its customers, services and products that are easy to understand and
use. All offerings are stimulating and at the same time extremely unique as Aircel
continue to re-invent itself constantly to deliver the best and most up-to-date
services. The brand instils a feeling of pride, confidence and reliance among all
stakeholders by anticipating their desires and fulfilling the same efficiently.
Aircel had positioned itself as a data led telecom player with a focus on young
Indians and has consistently addressed the multi-functionality of a mobile phone
in many innovative ways. Aircel had many firsts to its credit: from simplifying
GPRS into Aircel Pocket Internet; to being first telecom player to introduce
Facebook Voice Updates and now partnering with Avast for anti-virus mobile
security solution and with Amazon Web services for Aircel Backup, a cloud
based storage solution.
Being a caring and responsible corporate, Aircel is involved in initiatives like
‘Save Our Tigers’, an effort to save and grow the dwindling population of tigers
in India. The ‘Save Our Tigers’ campaign made India wake up to the alarming
fact that there were only 1411 tigers left in India through its 360 degree awareness
program. Aircel had worked relentlessly to raise awareness and support people
on the ground to provide safe habitat for the Tiger.

Summary on financial performance of the company

The financial highlights of the Company on a standalone basis for the financial
year under review are as follows:
Total Income is Rs.1, 005.38 Crore as against Rs.1, 254.62 Crore for the previous
financial year.
Profit / (Loss) (before Depreciation, Interest and Financial Charges (Net),
Exceptional Items and Tax) (PBDIT) is Rs. (79.67) Crore as against profit / (loss)
of Rs. (40.65) Crore for the previous financial year.
Profit / (Loss) after Tax (PAT) before extra-ordinary and prior period items is Rs.
(2,627.66) Crore as against Rs. (629.86) Crore for previous financial year.
Aircel Limited's operating revenues range is Over INR 500 cr for the financial
year ending on 31 March, 2016. It's EBITDA has decreased by -14.10 % over the
previous year. At the same time, it's book net worth has decreased by -43.91 %.
Other performance and liquidity ratios are available here.
The total paid-up capital is INR 8,334.77 cr. The last reported AGM (Annual
General Meeting) of the company, per our records, was held on 26 July, 2017.
Also, as per our records, its last balance sheet was prepared for the period ending
on 31 March, 2017.