Do Capital Structure and Profitability Influence Firm Value? Empirical Evidence from Indian Pharmaceutical Companies

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Empirical evidence shows that capital structure and profitability significantly enhance firm value in Indian pharmaceutical companies.

Capital structure positively impacts firm value, with higher long-term debt leading to increased firm value.
Profitability, particularly ROE, shows a significant positive influence on firm value, driving improvements.
Panel regression analysis conducted on 16 pharmaceutical companies over six years provides robust findings.
Indian pharmaceutical companies may benefit from prioritizing debt for capital needs and enhancing profitability to grow firm value.

Ambadkar et al. (2025) studied this question.

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