It’s a good set of numbers because we have got a big earning surprise at Rs 1,079 crore. Those numbers are way above our expectations at Rs 975 crore but the revenue numbers are absolutely flat between quarters. There could be a lot of other income, which we were expecting in any case, because of the big hedges that were taken by Infosys.

The profit numbers are whole lot higher than our expectations but the sales numbers are lower than our expectations. The rupee has certainly hurt this quarter. They have managed to deliver Rs 1,079 crore this quarter as against Rs 1,020 crore in the corresponding previous quarter, if you take out the tax right back. Without the tax right back, there is actually been an about 4-5% jump in sequential profits.

If you take the reported numbers from Rs 1,144 crore including the tax right back, you will see a marginal slip in net profit sequentially. A 5% jump in sequential profits without the tax right back is a very impressive set of numbers. There will be a lot of hedging profits out there, which has boosted other income.

The topline number is not terribly encouraging. We were expecting about Rs 3,813 crore and they have kicked in at Rs 3,773 crore. They are about Rs 40 crore odd lower than our expectations. It is flattish or 1% down sequentially on the revenue side.

On the profit picture, they have done far better. If this is the case then they might actually not have to lower their full year guidance and that’s exactly what the market will be focused on. Profits at Rs 1,079 crore raise hopes that maybe Infosys will not need to lower their guidance for the full year. There is a surprise on the bottomline, there is no getting away from that.

I think you will see a lot of other income out there. I don’t think with a flat revenue picture between quarters, there is any great operating margin expansion or lower than expected operating margin dip, which could have resulted in this profit figure. So 1,079 crore is a big surprise and I think it adds about a rupee-and-a-half to earnings per share. This means that Infosys may not struggle to keep its full-year guidance of Rs 80-81.

There were fears that they could actually do between Rs 950 and Rs 975 crore because of that slippage of Rs 100-150 crore and you could see them going extremely conservative on the full year. They may still chose to do that but I think the chances are much higher now. They may not need to lower the guidance for the full year because these numbers have come in on the higher end of expectations.

There will be damage on margins and there is no of getting away from that. I think the street might have underestimated the other income and that might come in much higher than expectations. We were expecting just under Rs 150 crore in other income. I would not be surprised if we have more than Rs 200 crore of other income because of the high amount of hedging and hedging profits, which may have come in.

If you look at the revenue picture between quarters, it tells you that the picture has not been great in this quarter. In fact, Infosys has missed its guidance for revenues this quarter and that itself is a very telling comment. There were expectations that it would have clocked 8-9% volume growth. To have negated that entire volume growth because of the rupee, tells you that it has been not a good picture. We probably will see quite a bit of operating margin pressure, maybe more than 300 bps as well. We will wait and see if this is good enough for Infosys to hold its full year guidance of Rs 80-81.

Infy’s results have come at a time when the overall global markets’ pace is a little weak this morning. I am wondering how the pulls and pressures will work out because there is a big sell-off in the US and some lukewarm movements in the Asian markets. Yesterday, the markets did not close very well.

On global markets:

The Asian markets’ sell-off is not extremely acute this morning. Most markets are down between half a percent and two-thirds of a percent. I don't think that qualifies as a big 1.5-2% sell-off. The cues are not great but they are not too terrible.