India's major Engineering Company Larsen & Toubro has declared an 11% rise in net profit for the third quarter but subsequently reported delays in the order inflows in FY11.

Chief financial officer YM Deosthalee said that March remains the crucial month for them. If orders get delayed or deferred after March then the company has to miss order inflow guidance because sizeable amount of orders have to be decided in March only.

In spite of increase in net profit in the third quarter of 2010-2011, company is facing decline in the order inflows due to delays in decision making by the clients. The company has recorded growth of 8% in the nine months ended December 2010 by winning orders worth Rs 49456 crore. Its order book is worth 114,882 crore as on December 31.

On Monday, company recorded profit of 811 crore for October-December. Net sales rose 40%, to 11,413 crore, due to rise in Engineering business.

Whereas the, company operating profit declines to 10.8% in third quarter when compared with 12.4% a year ago. This decline is due to various factors like rise in the cost of raw materials and rise in the execution of orders. As a result of decline in the operating profit, shares of L & T declined on the BSE on Monday.

Shailesh Kanani, equity research analyst from Angel Broking said that despite of all these factors affecting the operating profit of L&T, it has a great future ahead. The problem begins when margins continue to decline for the next
6-9months.

Revenue for the subsequent year mostly depends upon the order inflow in the fourth quarter.

Deosthalee also said that all the plans have been made to launch the initial public offer (IPO) of subsidiary L&T Finance by March.