The legendary investor Warren Buffett emphasises paying “reasonable” valuations for a share and has been wary of investing in stocks with too much of investor interest, and the resulting “euphoric” valuations.
A similar paradox for investors on Dalal Street — the growth prospects of leading MNC engineering companies like ABB India and Siemens are bright on expectations of a revival in private capital expenditure (capex) over the next few quarters along with local and central governments expanding their infrastructure programs.
However, the valuations for these leading MNC engineering stocks are often described as “frothy” – ABB India trades at a consolidated P/E of 60 times, according to Screener.in, while Siemens trades at more than 67 times.
The homegrown leader of the sector, Larsen & Toubro (L&T) trades at a P/E of 34 times, according to Screener.in
Q2 Scorecard: ABB vs Siemens vs L&T
Siemens declared its results after the close of Friday trade, and it reported a 16% y-o-y growth in its consolidated revenue from operations to Rs 5,171 crore in the September 2025 quarter. The company highlighted a strong revenue growth of 20% in its smart infrastructure segment to Rs 2,724 crore. Recent projects this division is working on include a consortium partnering with the Bangalore Metro Rail Corporation Limited (BMRCL) for the Bengaluru Metro Phase 2, which spans over 58 kilometres.
Its new orders gained in Q2 FY 26 were Rs 4,800 crore, a rise of 10.5% on a y-o-y basis.
However, the company’s other income was Rs 122.4 crore in Q2FY26 vis-a-vis Rs 235.5 crore a year earlier. Siemens had a one-time gain from property of Rs 68.8 crore in the September 2024 quarter.
As a result, its consolidated net profit fell nearly 7% y-o-y to Rs 485.4 crore in the September 2025 quarter.
Meanwhile, ABB India’s consolidated revenue from operations grew 13.7% y-o-y to Rs 3,310.7 crore in Q2FY26, and it was driven by its key electrification division that grew 19.5% on a y-o-y basis to Rs 1,378 crore in the quarter under review. This division has benefited from an increase in work related to data centres.
It had got orders of Rs 3,233 crore in the September 2025 quarter vis-a-vis Rs 3,342 crore a year earlier.
And a higher cost structure including raw material resulted in ABB India’s consolidated net profit declining 7% y-o-y to Rs 408.9 crore in the September 2025 quarter.
Earlier, the leader in the sector, Larsen & Toubro (L&T) reported consolidated revenue from operations grew nearly 10.5 % y-o-y to Rs 67,983.5 crore in the September 2025 quarter, helped by a 47.5% y-o-y growth in revenues in its energy projects division to Rs 13,090.3 crore. The Mumbai-based player has benefited from a pick-up in capital expenditure from ultra mega hydrocarbon projects in the Middle East.
Its order inflow stood at Rs 1.15 lakh crore in Q2FY26, a rise of 44.6% on a y-o-y basis. In contrast to MNC engineering companies, L&T was able to deal with higher raw material costs and its consolidated net profit grew 14% y-o-y to Rs 4,687 crore in the September 2025 quarter.
The Efficiency Check: Return on Equity (RoE)
L&T has a RoE of 16.6% during the current financial year, according to Screener.in, while it is 11.8% for Siemens, and 28.8% for ABB India.
Investors on Dalal Street
Siemens declared its results after the close of Friday trading, and in late Monday trading, the stock gained 4.6% to Rs 3,233. The stock had hit a 52-week high of Rs 4,711.3 on 16 December 2024, and has corrected nearly 31% since then.
ABB India gained 1% in late Monday trade to Rs 5,011, and it has corrected nearly 37% from its 52-week high of Rs 7, 959.9 that was reached on 17 December, 2024.
And L&T gained 0.3% in late Monday trade to Rs 4,013, and not too far from its 52-week high of Rs 4,062.5 that was reached on 30 October, 2025.
Growth outlook and valuations
The RBI has taken several measures to lower interest rates and boost lending in the economy. Investors will be keeping a close eye on a pick-up in domestic capex trends, especially from the private sector. However, MNC engineering stocks are very richly valued and factor in the growth opportunities for the next few quarters, if not years.
Whether this faith in MNC engineering stocks pays off, only time will tell.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family do not hold the stocks discussed in this article.
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