Fund Manager Talk | Tata Mutual Fund deploying cash to buy stocks after market correction 

​The recent market correction, especially in the mid cap/small cap segment, has certainly made select businesses worth adding to portfolios, says Chandraprakash Padiyar, Senior Fund Manager, Tata Asset Management.”We have deployed quite aggressively in our funds during the current correction – however the deployment has been in select businesses and not across the board,” he says.Edited excerpts from a chat:Do you think that the impact of the Rs 1 lakh crore boost to consumption from income tax relief in the Budget would be felt more on discretionary than staples?Firstly, some of the tax benefits one should assume will be used for increase in savings or deleveraging. Over the past 5 years household leverage has moved higher and it would be prudent to assume that a part of the benefit would be used for reduction of debt. In other words, the household savings rate will certainly benefit from this move of the government. On Consumption, we are optimistic on consumer discretionary to pick up pace. For Staples, penetration levels are already high and may not move the needle much in terms of incremental growth. Residential housing could be another asset class where demand may improve. When you leave more money in the hands of young Indians, it will have a multiplier effect and the list of winners would go well beyond FMCG and consumer durables to auto, QSR, travel and tourism and even capital markets. Which other sectors do you think stand to gain as a result?Auto, Electronics, Real Estate, Travel & Tourism, Entertainment, Home Improvement, Consumer Durables are some of the key consumer discretionary spends of a household. Among these Real Estate, Auto and Electronics from an equity market perspective would be the places we would expect higher positive flow through of higher savings rate.What do you think would be the impact on rail and defence stocks for the rest of 2025 given that the Budget had little to offer when it came to incremental growth in capex?Defence generally is a long lead item in terms of capex. Over the past few years the government has committed to large projects and ordering has been made. What is provided in the budget is basically a derivative of the contracted amount and is being spent accordingly. Our understanding is that spending on Defense will grow at a steady pace over the foreseeable future. Defense stocks were pricing in high growth along with high margins. In our opinion expectations need to normalise lower and hence it is logical to assume some time correction in this segment of the market. The Railways government seems to have refocused their attention towards safety and security in terms of implementation of the Kawach signalling system. Companies focused on this segment of Indian Railways are likely to see better growth whereas other segments will probably see growth picking up after some pause. Similar to defence, listed companies catering to the railway segment were pricing in very high growth with higher prof