KONE Corporation is pivoting toward India's aging elevator market, launching new digital retrofit solutions to drive recurring service revenue. While the company aims to modernize its massive installed base, investor focus remains on the ongoing €29.4 billion TK Elevator acquisition and the regulatory hurdles currently under review by the Competition Commission of India.
KONE Corporation is strategically shifting its focus in India toward the modernization of its existing elevator infrastructure. With nearly one million elevators already installed across the country, the company is looking to capture demand from older buildings that require upgrades for safety and efficiency. To support this, KONE recently inaugurated its first Digital Experience Centre in Pune on October 9, 2026, which is designed to enhance predictive maintenance and passenger safety across its network.
This move toward retrofitting is a key part of the company's broader business strategy. Globally, the service and modernization segment contributes over 65% of KONE's total revenue, providing a stable, recurring income stream compared to the volatility of new equipment sales. In India, the company aims to double its connected elevator fleet to 100,000 units within the next year, leveraging digital tools to reduce upgrade downtime for residents in mid-rise buildings to as little as one week.
Financially, KONE remains focused on maintaining margins amidst changing global demand. In its second quarter of 2026, the company reported sales of €2.94 billion with an adjusted EBIT margin of 12.6%. However, the company faces external pressures, including a persistent slowdown in the Chinese new-equipment market, which continues to act as a headwind for global operations.
Simultaneously, the firm is navigating a major consolidation phase through its proposed €29.4 billion acquisition of TK Elevator. While KONE’s Extraordinary General Meeting has already approved the deal, the final completion remains subject to antitrust reviews by regulators, including the Competition Commission of India. The company expects the transaction to close in 2027, but the process has introduced uncertainty regarding the potential for divestments to satisfy antitrust requirements in various markets.
Investors should track the pace of the modernization rollout in India and any further updates from regulatory bodies regarding the TK Elevator merger. Additionally, the company's ability to manage integration costs and rising inflationary pressures while maintaining its 12.6% EBIT margin levels will be important factors to watch in the coming quarters.