Letter of Recommendation is detailed evaluation of your potential from the point of view of a person who has seen you evolve in a responsible and smart individual from a naive one.It is a sort of validation to your potential and plays a significant role while you are applying for your Masters.They are important for your MBA applications or Research Based courses abroad.
They offers an insight to your capabilities;your ability to work in a team;your leadership skills.Most universities require 2-3 letter of recommendation along with your application generally from your former teacher or your guidance counsellor.
Well,Letter of Recommendation is something that gives edge to your application form and makes it different from others.
Hope this helps.

Hello Kandikunnta

As the name suggests, a letter of recommendation is a letter issued by the professor/academician under whom you’ve worked in the past. LORs are quite important as they reflect how well you worked, and also your interpersonal skills like punctuality, the zeal to learn, and how good a resource you can be. They are a medium through which a professor is vouching for your personal and professional conduct, and hence, the stronger the LOR, the better it is.