Engineering company Siemens Ltd. (500550.BY) Friday said its net profit for the fiscal second quarter rose 11%, as the Indian unit of Siemens AG (SI) benefited from its backlog of orders.

Net profit for the January-March period rose to INR3.04 billion from INR2.74 billion a year earlier.

Sales grew 24% to INR37.60 billion from INR30.36 billion.

Managing Director Armin Bruck said difficulties in getting coal, land and environmental clearance and high interest rates have slowed new projects by power and infrastructure companies, which form Siemens's key client base.

Indian engineering companies are facing a tough time getting orders in a climate of high interest rates and slowing economic growth. Also, high prices of raw materials such as steel and other metals as well as fuel are also eating into their margins.

"The confidence is still low in the markets we operate in," Bruck said in a statement.

He said higher cost and competitive pressures affecting pricing of projects have dented the company's profit margin.

Siemens's total cost rose 23% in the past quarter to INR33.49 billion.

-By Prasenjit Bhattacharya, Dow Jones Newswires; 91-11-4356-3358; prasenjit.bhattacharya@dowjones.com