The economic performance of firms can be measured in terms of their growth as well as increasing expenditures on superior technologies; though profitability of the firms has remained most widely used index for measuring performance. However, on the one hand effective and efficiency performance of company can be measured in terms of profitability, on the other hand productivity growth is also been recognized as a key feature of economic performance. Therefore the present paper analyzes the performance of selected firms in terms of profitability as well as their productivity. There is considerable debate that in the era of liberalization performance of firms has been affected in public and private sectors differently. Steel is a very important commodity in the world trade and India has always participated in this trade both as an importer and as an exporter. In what follows we attempt to ascertain the impact that reforms have had on steel at firm specific level. Therefore, in present paper we attempt to analyze the performance of firms operating in public as well as private sector in steel industry. To represent these two sectors we took SAIL from public sector and TISCO from private sector. To find out the relationship between profitability and productivity of the SAIL and TISCO, ordinary regression model (OLS) has used. The regression analysis shows that the TFP is the prominent variable in explaining profitability of both the firms.