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Dr Reddy Lab Shares Jump On Buyback Plan

Dr Reddy's Lab shares jumped over 3 per cent on Thursday on hopes of a share buyback plan. 

"A meeting of the board of directors of the company will be held on February 17, consider the buyback of equity shares of the company," said Dr Reddy's Lab. 

Traders say Dr Reddy's buyback plan is aimed to lift sentiments in the company's shares, which have been hammered down because of concerns over the fate of three of company's manufacturing units. These units are under the scanner of US drug regulator for quality issues. 

Shares of India's second biggest drugmaker are down 31 per cent in last six months as compared to the 14 per cent fall in the benchmark Nifty Pharma index. 

Buyback of shares by a company is taken positively by investor community as it indicates management's faith in the prospects of its business. Companies buy their shares from open markets when they feel that their shares are undervalued, say analysts. 

Dr Reddy's Q3 earnings, which came on Tuesday, also failed to meet Street expectation on lower emerging market sales. 

As of 11.42 a.m., Dr Reddy's shares traded 1.43 per cent higher at Rs 2,926.45 apiece compared to 0.93 per cent fall in the broader Sensex.

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Date : 11-02-2016 12:32:05