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Business Standard

Sika sees major growth opportunity in India amid infra, tax reforms

By Liana Baker and Reto Gregori Sika AG Chief Executive Officer Thomas Hasler views the Indian market as being one of the biggest opportunities for the Swiss building products company over the next few years. 'They fixed their tax system and they are now working on infrastructure,' Hasler said in an interview this week in New York. 'They're working on, let's say, the foundation for the economic growth.' Prime Minister Narendra Modi was sworn in for his third term last year, ensuring he will serve until at least 2029. He has made infrastructure a priority, from the building of oil tankers to rail projects and domestic gas production. That should benefit companies like Sika, which makes sealants, mortars and other building adhesives. The Baar-based company's shares closed at 209 Swiss francs on Friday, giving Sika a market value of about 33.5 billion francs ($41.3 billion). 'It's rail, it's road, ports, airports everything,' Hasler said, adding that the company needs to further invest in India since there's still four to five years before the next election. About 3 per cent to 4 per cent of Sika's revenue comes from India and that could grow to double digits over the next 10 years, he said. 'In India, market potential today is probably somewhere $3 to $4 billion,' He said. 'We may go up to $6 billion or $7 billion in 10 years.' To be sure, he said success isn't guaranteed in the world's second-most populous country and some of its megacities have 'pains.' 'This is not going to be in 10 years taking over Europe — this is long term. But India has a potential within 10 years to be much more significant,' he said. He added that Sika has a 'good footprint' in the country, which it doubled through its acquisition of MBCC Group. MBCC is Sika's largest acquisition to date, at about 5.5 billion francs. The deal for the former construction chemicals business of BASF SE, which it bought from private equity firm Lone Star Funds, closed in 2023. Sika fended off a takeover approach from rival Cie. de Saint Gobain SA several years ago, one of the most acrimonious takeover fights in Europe.