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The capital structure is the mixture of debt capital and equity capital that the firm uses. The choice of appropriate source of fund for capital structure is one of the major policy decisions taken by a firm. In this paper an attempt has been made to study the capital structure and its impact on profitability by the help of analysing the last five years balance sheet and financial position through various ratios and components of capital. To achieve the objective of analysing the capital structure of the steel industry component wise dominance and a relationship between the capital structure and profitability of steel industry by taking last five years annual reports of TATA STEEL LTD. It has been observed from the study that shareholders fund has a positive correlation with the element of non-current liabilities but contains a mixed impact with current liability. On the other side, from the profitability point of view, debt equity ratio has a positive impact on price earnings ratio and dividend payout ratio which implies debt capital will improve on profitability measurement ratios.