Sixth seed Sindhu, who is returning from injury, lost 12-21, 10-21, 15-21 to Rio Olympics champion Carolina Marin of Spain in 59 minutes.
Double Olympic medallist PV Sindhu faltered on her return to action after a long injury lay-off, but in-form HS Prannoy continued his sensational run to progress to the second round of the Malaysia Open Super 1000 badminton tournament in Kuala Lumpur on Wednesday. (More Badminton News)
Sixth seed Sindhu, who was playing her first match since she sustained a stress fracture on her left ankle en route to her Commonwealth Games gold in August, lost 12-21, 10-21, 15-21 to Rio Olympics champion Carolina Marin of Spain in 59 minutes.
Earlier, world No. 8 Prannoy lived up to his new status of being India's best-ranked men's singles player with a come-from-behind 22-24, 21-12, 21-18 victory over Lakshya Sen, ranked 10th, in an edgy opening-round contest that went for little over an hour.
The 30-year-old from Kerala will next face Indonesia's Chico Aura Dwi Wardoyo.
Satwiksairaj Rankireddy and Chirag Shetty also advanced to the pre-quarterfinals with a 21-16, 21-13 win over the Korean pair of Choi Sol Gyu and Kim Won Ho.
The world No. 5 pair will meet the Indonesian combination of Muhammad Shohibul Fikri and Bagas Maulana.
Malvika Bansod, however, failed to cross the opening hurdle, losing 9-21, 13-21 to second seed Korean An Se Young.
The women's doubles pair of Ashwini Bhat and Shikha Gautam lost 10-21, 12-21 to Thailand's Supissara Paewsampran and Puttita Supajirakul.
Sindhu came into the match with a 5-9 head-to-head record against Marin, who had a tough last few years, having suffered an ACL in both her knees.
The Indian had a rusty start as she struggled with her finishing, allowing an aggressive Marin to grab an 11-3 lead at the interval. The Spaniard then zoomed to eight game points with precise returns, converting them at the first opportunity.
In the second game, Sindhu returned the favour, moving to a massive seven-point lead at the break. The Indian followed up her strokes well, playing some excellent shots and looking more polished at the net as she grabbed 10 game points with the Spaniard going to the net time and again.
Sindhu converted it when Marin faltered with her net play again.
In the decider, Marin again found her touch as her cross-court returns, punch clears and body smashes kept Sindhu at bay. The Spaniard moved into the breather with a four-point advantage after Sindhu went wide.
On resumption, Sindhu slumped to 8-14 following a judgement error -- a long shot -- and Marin produced another body smash.
Sindhu failed to negotiate Marin's pacey returns as she hit out, allowing the Spaniard to reach 19-13.
Marin grabbed six match points after Sindhu played into the net, squandered one following a service error before leaving her opponent cramped for space with another body return to end the contest in her favour.
In men's singles, Sen came into the match against Prannoy holding a 3-2 head-to-head advantage for the previous year.
The match lived up to its top billing with the duo fighting tooth and nail right from the start. They played at a high pace and it was Prannoy, who managed to grab a two-point lead at the break, but Sen soon drew parity at 13-13.
Following a few disputable line calls, the duo was locked at 19-19 at one stage. Sen then earned a game point, but squandered it. Soon, Prannoy grabbed two game points at 21-20 and 22-21 but he too missed it, as Sen eventually managed to nose ahead after grabbing another game point.
In the second game, Prannoy was 4-1 up with Sen committing a series of unforced errors. The Almora shuttler tried to play an aggressive game, creating acute angles, but his senior colleague was always a step ahead.
With Sen struggling, Prannoy rushed to a nine game-point advantage. Sen saved one before the Kerala shuttler sealed it with a smash to roar back into the contest.
In the decider, Sen moved into an 8-4 advantage, but Prannoy erased the deficit and clawed back at 9-9 with a flurry of smashes before entering the break with a slender lead after dominating a parallel game.
After the final change of ends, Prannoy opened up a three-point lead with his better placements and sharp strokeplay.
Sen's attempt to go for the lines backfired, as soon it was 18-14 advantage for Prannoy.
A push on the back-line earned Prannoy three match points and he sealed it with another backhand block which kissed the line even though Sen looked clearly upset with the line call and flung his racquet in frustration.