Shares of Hindustan Unilever (HUL) rose 2% to Rs 2,703.55 in intraday trade on Thursday, the highest level for the current calendar year 2023 (CY23), on hopes of a pick-up in trading volumes.

Shares of the largest fast-moving consumer goods (FMCG) company were trading near its 52-week high of Rs 2,741 on December 9, 2022. HUL has outperformed the market over the past week, with shares up 4%, compared with a 1% gain in the S&P BSE Sensex.

HUL is India’s largest FMCG company, with over 40 category brands. It is a market leader in fabric washing, personal washing, cosmetics, shampoos and many other categories.

Management said that against a challenging operating environment, HUL delivered a solid overall performance in FY22-23 (FY23), mainly attributable to the company’s focus on expanding its consumer franchise and protecting its business model.

HUL said its home care business experienced unprecedented inflation of input costs in FY23 due to sharp increases in the prices of key raw materials such as crude oil, soda ash, caustic soda and packaging materials.

The operating environment is expected to remain volatile soon due to global slowdown risks and weather-related uncertainties. At the same time, inflation has moderated, and commodities remain elevated relative to long-term averages.

Looking ahead, HUL expects a rebalancing of price-volume growth. Price growth will moderate as underlying price increases and inflation continue to moderate. Meanwhile, market volumes are expected to recover as adjustments in consumption habits lag gradually, the company said.

“The company remains focused on managing our business flexibly and expanding our consumer franchise while maintaining healthy margins. We have a consistent, competitive offer on the medium to the long-term potential of the Indian FMCG industry and HUL, profitable and responsible growth,” management said.

Company margins improved sequentially as key crude oil and palm oil-related commodities fell sharply over the past six to eight months.

ICICI Securities maintains a “hold” call with a target price of Rs 2,780 per share.