Chambal Fertilisers is volatile like the rest of the market today. The stock opened in the green, went on to hit a new 52-week high at Rs.61.50 though it has since then slipped along with the broader market. It is currently down 3% at Rs.58.15.

The stock has been up sever since reports came in that the Govt is looking at the option of hiking prices of urea by at least 10% to contain the huge cost of subsidy. Two options are being considered – price could be included in the Budget in July or it could get approved in the Budget.

How far this will be feasible one needs to wait and watch as the Pranab Mukherjee yesterday said that containing food inflation was a priority, which is in direct contrast to hiking urea prices, which in turn will lead to increase in inflation.

But if this comes through it could ease the margin pressures for likes of Chambal and RCF.