The Indian ace singles player lost 16-21 15-21 to Zhao Jun Peng of China.
The Indian ace won 21-14, 21-12 in a contest that lasted 40 minutes.
The 29-year-old from Kerala dished out another impressive performance to outwit Ng Long 21-11 21-18 in a second round match that lasted 41 minutes.
This was Prannoy's first-ever win against Sen out of their three head-to-head meetings so far.
Indian flavour will be missing in the men's section at the Indonesian Open Super Series 500 after the withdrawals of Srikkanth, Kashyap and Prannoy.
The 29-year-old from Thiruvananthapuram won India's decisive singles in quarterfinals and semifinals against superpowers Malaysia and Denmark.
India's historic win is a testimony to the squad's depth.
Despite suffering the injury after slipping on the front court while going for a return, Prannoy continued after taking a medical timeout to upset world No. 13 Rasmus Gemke 13-21, 21-9, 21-12 to secure India's historic win.
The Kerala shuttler defeated Rasmus Gemke 13-21, 21-9, 21-12 to register a 3-2 win over Denmark.
World Championships bronze medallist Lakshya Sen started the proceeding with an easy 21-16, 21-13 win over world No. 64 Max Weisskirchen.