New Delhi, May 6 -- Bajaj Auto Ltd warned that demand for two-wheelers in India is likely to soften as rising raw material costs, driven by the West Asia conflict, push up vehicle prices and erode gains from recent GST cuts, even as it reported strong earnings growth and unveiled its largest share buyback.

Bajaj Auto's executive director Rakesh Sharma said on Wednesday in a post-earnings media conference that more than a third of GST's gain has already been wiped off owing to price hikes from companies.

"GST rate cut really uncorked demand and now, with bike prices increasing, part of that reduction has got reversed and, therefore, it will obviously have an effect on the demand environment," Sharma said.

The country's fourth-largest tw...