The Sixth seeded Indian fought hard before going down 21-23 17-21 to Malkov in a 42-minute men's singles competition at the Sport Hall.
Praneeth had defeated local player Stanislav Pukhov 21-13 21-4 in the round of 16, while he got a bye and a walkover in the first two rounds respectively.
Praneeth was left to do the catching up job right from the start after Malkov opened up a 4-1 lead early on in the match.
In the second game, Praneeth once again fought hard to make it 14-13 after lagging behind 8-13 but Malkov kept his nose ahead to reach the next round.
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