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* December qtr net 11.4 bln rupees vs f'cast 11.5 bln
* Cuts FY14 order book growth view to 15 pct from 20 pct
* Shares end down 0.7 pct ahead of results (Adds order book, comment from executive, contracts won, economic context)
By Prashant Mehra
MUMBAI, Jan 22 (Reuters) - India's Larsen & Toubro Ltd (L&T) on Wednesday cut its order book growth outlook for the current fiscal year, as a surge in overseas orders looked unlikely to offset the impact of a domestic slowdown in an election year.
L&T, India's biggest engineering group whose profitability is seen as barometer of the country's economic health, has been seeking more orders abroad as domestic spending stagnates on infrastructure, factories and equipment.
Yet delays in buying land and receiving statutory clearances, as well as the prospect of national elections by May, have deterred major investment in an economy expanding at its slowest pace in a decade.
L&T said it expected its order book, a key gauge of demand, to grow 15 percent in the fiscal year ending in March, from 20 percent forecast earlier, due to the poor investment climate, Chief Financial Officer R Shankar Raman said.
However the company had a "fighting chance" of meeting its sales guidance of 15 percent in the fiscal year, he said after the company released earnings.
"The general weakness of the macro-economic environment continues," Raman told reporters. "Considering that the country is already in election mode, policy issues are still to be addressed in their entirety."
L&T, which posted a 12 percent rise in December quarter net profit, said new orders grew 21 percent to 217.22 billion rupees, thanks primarily to international customers, which accounted for 38 percent of new business.
Order inflows from overseas markets more than doubled, mainly due to a surge in demand in the Middle East, the company said, adding it was looking to boost its presence in select overseas markets.
Major contracts won in the quarter include a $473 million power transmission project in Qatar, a $72 million engineering project in Oman and a $110 million airport project in India's Karnataka state.
The Mumbai-based group, which lays roads, builds ships, develops real estate and makes power plant equipment, reported a 13 percent year-on-year rise in the value of its order book at the end of December.
Third-quarter net profit rose to 11.36 billion rupees ($183.6 million), compared with an 11.5 billion average of estimates from 16 banks and brokerages, according to Thomson Reuters data.
Profit grew 22 percent to 12.4 billion rupees after accounting for an exceptional gain on the dilution of a stake in a subsidiary, it said.
Shares of L&T, which has a stock market value of $15.1 billion, closed down 0.7 percent before the earnings report, in a Mumbai market that gained 0.4 percent. The shares are down nearly 6 percent so far in 2014, compared with a little-changed benchmark index.
Gross revenue also rose 12 percent to 145.34 billion rupees as L&T booked higher revenue on the completion of contracts.
In November, L&T said it is evaluating the possibility of raising funds from certain assets in its infrastructure development unit, such as through a Singapore listing of road projects or the sale of part of its stake.
L&T is holding "several discussions" and is aiming to finalise a deal by end of this fiscal year, Raman said.
$1 = 61.8600 Indian rupees Writing by Sumeet Chatterjee; Editing by Christopher Cushing and David Holmes