IMPACT OF CAPITAL STRUCTURE ON PROFITABILITY OF NSE LISTED AGRICULTURAL COMPANIES IN INDIA

The study analyses the effect of capital structure on the profitability of agricultural companies listed on national Stock Exchange of India. As agriculture is transitioning towards modernisation through agro-processing, agro-chemicals, it is necessary to understand the financial structure of companies. Using panel data from 2020 to 2024 for top 15 NSE-listed agricultural firms, the study uses quantitative methods such as Pooled OLS, Fixed Effects and Random Effects regression models to analyse the relationship between capital structure variables- Debt to Equity and Interest Coverage Ratio and profitability indicators- Return on Equity (ROE) and Return on Assets (ROA). Control variables include Current Ratio and Total Revenue. Diagnostic test such as Breusch-Pagan, Durbin-Watson, and VIF confirm the suitability of regression analysis. The results show a significant negative relationship between Debt to Equity and Return on Equity, indicating that higher leverage reduces shareholder returns. Conversely, ROA is positively influenced by Current Ratio and Total Revenue, highlighting the importance of liquidity and operational efficiency. The findings underscore that while debt may support asset utilization, excessive leverage can reduce equity returns. The study contributes to literature by offering sector-specific insights and provides practical implications for financial managers, investors and policymakers in optimizing capital structure strategies within the agricultural sector. Keywords: Capital Structure, Profitability, Agricultural Companies, Return on Equity, Return on Assets.