Pallikal, who played sublime squash to reach the biggest final of her career, was beaten 7-11 11-5 7-11 8-11 by a superior opponent on the day.
The final yesterday saw 18-year-old El Sherbini maintain her stellar form which sent three seeds out of the tournament including top seed Low Wee Wern. The Egyptian had created a furore by shocking World No.1 Nicol David in the World Championship last month.
El Sherbini was quick to share her joy.
Sarah Fitz-Gerald, Pallikal's coach and five-time World Champion, said her protege matched El Sherbini stroke for stroke, but her "fearless" opponent was better in winning crucial moments.
"Dipika played well but Sherbini hit some great shots at important moments. Both girls got some bad referee decisions but Dipika got a rough one in the fourth game which gave Sherbini a little break," Fitz-Gerald told PTI.
The Chennai girl had beaten eighth-ranked Madeline Perry of Ireland in a 75-minute long semifinal on Saturday.
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