Brokerage Reports: AI Threatens IT Earnings, Mixed Outlook for Retail, Pharma, Defense Stocks

• Brokerage firms are adopting a selective and cautious approach due to AI's threat to IT sector earnings, with Jefferies highlighting structural risks to application service revenue.
• Jefferies warns that new AI tools could challenge 40-70% of IT companies' app service revenue, underestimating market consensus growth expectations and potentially pressuring valuations.
• Cognizant's Q4FY25 revenue outperformed Indian IT peers, with Citi and Nomura noting strong deal momentum despite sector caution.
• Devyani International receives a 'Buy' from Jefferies due to leadership continuity and Pizza Hut turnaround, but Bernstein is cautious, citing acquisition-driven growth and margin pressure.
• Trent sees mixed views: Bernstein gives a 'Buy' (Rs 5,000), Jefferies a 'Hold' (Rs 4,575), and Citi a 'Sell' (Rs 4,350) due to concerns over margin sustainability.