MSME asset quality deterioration
MSME portfolio stress has increased suddenly, with 13 of 17 tracked industries showing slowdown and credit supply contracting. Restructuring may not fully contain losses.
BAJFINANCE / Q1-FY26 / risks
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Bajaj Finance · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
high
Political risk in Karnataka
Management cited political risk in Karnataka, which accounts for 11% of the balance sheet, leading to a 40-50% business cut in the state. Further escalation could impact growth and asset quality.
Elevated credit costs from captive auto book
The winding-down two-wheeler/three-wheeler captive book continues to generate higher-than-expected loan losses, with GNPA rising to 6.38%.
Succession planning uncertainty
Management acknowledged that succession planning remains a work in progress, with no clarity until closer to March 2028, creating potential leadership risk.