Shares of iGate Corp. have risen by as much as 28% since rumours surfaced that former Infosys Ltd executive Ashok Vemuri would join the company. Compared with its lows in early June, iGate shares had nearly doubled to $27.59 on the Nasdaq before the earnings announcement.

The company’s September quarter results have also cheered investors. Its revenues rose by 3.6% sequentially to $293.4 million. Annual growth rose from 5% in the first six months of the year to 8.2% in the September quarter.

But given the relatively small size of the company, it doesn’t make sense to extrapolate any of this for the information technology industry. Besides, growth was largely driven by the Europe, Middle East and Africa regions, which, according to an analyst, was owing to the impact of certain large orders. Growth in the US was soft.

Profit margins rose, thanks to the depreciation of the rupee. The company’s net profit rose by 6.3% sequentially and 12.7% year-on-year, and analysts are likely to raise earnings estimates on the back of these results.

Even so, valuations aren’t cheap. “While these (recent) developments are no doubt positive, we believe this is largely priced in at valuations of 14.4x 2014 EPS of $1.93 and upsides from here require a material beat on our growth expectations of around 11% in 2014 (vs. 6.5% in 2013), which looks difficult to us," analysts at Nomura Research said in a 4 October note to clients. As a result, gains in the stock may be limited, beyond the 10% increase in the opening trade on Thursday post the earnings announcement.