Bajaj Auto, India's second largest two-wheeler player, on Saturday reported a 2% year-on-year growth in net profit at Rs. 741 crore for the second quarter as a slowdown gripped the two-wheeler industry. Revenue declined 4% at Rs. 5,139 crore. Motorcycle sales dropped 10%.

After two consecutive years of above 25% growth, two-wheeler industry has slowed down in the first half of the current financial year, growing at meagre 4%.

Bajaj's larger rival Hero MotoCorp will announce results on Tuesday. Hero too had a challenging quarter as its sales fell 26% in September and 10% in August. "In absolute terms, September 2012 volumes for Hero MotoCorp were the lowest since April 2010," said a report from Kotak Securities.

TVS, the fourth largest, saw sales declining 23% in September while this year so far its sales declined 15%.

"At the same time, the overall weakness in economic sentiment too is proving to be the two-wheeler industry's nemesis, the way it is playing truant to most consumer goods segments," rating agency ICRA. said.

According to Subrata Ray, senior group vice-president, ICRA: "The two-wheeler industry is likely to report a more moderate volume growth of 5-6% in 2012-13. The demand slowdown as well as base effect catches up with the industry that has demonstrated a strong volume expansion over the last three years at a cumulative annual growth rate of 22%.