This study examines the relationship between capital structure and financial performance of selected steel companies in India using panel data over the period 2013–2022. Capital structure is proxied by the debt–equity ratio, while financial performance is measured through return on assets, return on equity, return on capital employed and earnings per share. Firm size and current ratio are included as control variables. The study employs panel unit root and cointegration tests to determine long-run relationships, followed by Dynamic Ordinary Least Squares estimation to obtain consistent long-term coefficients. The findings indicate the presence of a stable long-run association between profitability indicators and leverage, with differential impacts across performance measures. The results suggest that internal profitability plays a significant role in determining financing structure decisions in capital-intensive industries like steel. The study contributes empirical evidence to the capital structure literature within the context of emerging market manufacturing firms.