According to the report, 'Non-financial companies - India 2020 Outlook', the ratings agency cited sluggish economic growth and lacklustre profitability behind weak conditions.
However, the report pointed out that infrastructure companies' strong market position and essential nature of services position them well to weather the slowing economy.
"Rated companies' credit profiles are unlikely to improve significantly over 2020-2021, due to elevated debt levels, weakening profitability and the continued economic slowdown, which is pressuring both investment and consumption," says Kaustubh Chaubal, a Moody's Vice President and Senior Credit Officer.
Further, Moody's expects India's GDP growth to slow to 6.6 per cent in 2020, weaker than in previous years, with limited prospects for government stimulus measures to improve credit conditions in the near term.
"Funding conditions also remain tight, slowing demand for consumer goods and leaving banks selective in extending loans to companies.
"The continued depreciation of the Indian Rupee against the US dollar meanwhile has limited negative credit implications for rated companies, as most have natural hedges in place."
Overall, refinancing risk for long-term debt maturities remains manageable for most rated companies, although they are reliant on continued annual rollovers of short-term working-capital financing, the report said.
Nonetheless, upside factors for Moody's outlook on India's non-financial companies include a ramp up of government's stimulus measures aimed at reviving consumption demand, and better funding and market liquidity conditions whereby domestic demand and consumer funding both get a boost.
( With inputs from IANS )