Bajaj Auto's shares tumbled nearly 12 per cent on Thursday after the motorcycle maker said it anticipated weak festival season sales, a warning that slammed other automakers and also weighed on the broader market.

The country's third-biggest motorcycle maker by sales said festival season sales of motorcycles had grown only about 1-2 per cent so far this month, falling short of market expectations of 5-6 per cent.

This indicated that the season, which runs from October to November and when Indians generally make big-ticket purchases, would see sales growth of just 3-5 per cent, well below industry expectations of at least 8 per cent.

The warning by Bajaj, the first automaker to report its results, weighed on the broader market, which fell 0.64 per cent, as the forecast all but confirmed that high inflation, especially in food prices, forced consumers to limit expensive purchases in the roughly month-long season that started in early October.

"Contrary to our expectations, the festive season has started on a weaker note and we do see a downside risk to the domestic two-wheeler industry growth assumptions if demand trends do not see a pick-up during the Diwali festival," Kotak Institutional Equities said in a note.

The day's fall wiped out ₹33,389 crore (nearly $4 billion) from Bajaj Auto's market cap, which is also India's top two-wheeler exporter.

The company's warning dragged down its bigger two-wheeler rivals Hero MotoCorp and TVS Motor by about 5 per cent each. The Nifty Auto index tumbled 2.8 per cent.

While Bajaj Auto's quarterly profit growth and margins largely met expectations, analysts said the stock's current valuation appeared to have priced in all positives.

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