Fourth seeded Prannoy fought hard before being stunned by Chinese Taipei's Lin Yu Hsien, seeded 11th, while seventh seed Verma went down tamely to unseeded Lee Cheuk Yiu of Hong Kong in straight games.
Prannoy, who had clinched the US Open title last month, was handed a 10-21 22-20 21-23 defeat in an hour and six minutes.
Former national champion Verma lost 19-21 16-21 in a match that lasted just 42 minutes.
However, after the break, Prannoy failed to earn a single point, even as Hsien bagged 10 successive points to seal the opening game 21-10.
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In the second game, Prannoy broke away from 5-5 to lead 13-8 at one stage, but the Taipei shuttler kept breathing down his neck and made it 17-17.
He then surged ahead to 20-18 before the Indian caught him at 20-20. Prannoy then held on to his nerves to win the next two points and take the match to the decider.
But it was the Taipei shuttler who had the last laugh as he managed to earn two crucial points at the end to advance to the semifinals.
Verma, who had beaten compatriot Parupalli Kashyap yesterday, was lagging behind from the very beginning in the first game, trailing 1-6. He then fell behind 6-11 at the break.
After the interval also Lee continued to stretch his lead to 14-8 but Verma managed to reel off four points on the trot to reduce the margin to 12-14.
In the second game, Lee once again went ahead taking a 5 -1 lead before extending it to 11-6.
By then Verma seemed to have run out of steam and the gap kept on getting wider. Eventually, the Hong Kong shuttler stole the game and the match away rather comfortably.