Sharmila was close to top-25 at even par for the second round with three holes to go. But she went into a tailspin and had a bogey-double bogey-bogey finish to crash out of the tournament.
From being even par with three holes to go, she ended at four-over 146 for 36 holes and missed the cut, which fell at three-over.
"It was just a bad day and I still can't believe what happened in the few holes," said Sharmila. "I just need to be patient and work hard."
Defending champion Ariya Jutanugarn fired a bogey-free five-under-par 66 in the second round of the Lalla Meryem Cup on Friday to grab a two stroke lead heading into the weekend at Golf de l'Ocean here.
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Laura Davies, Gwladys Nocera, Sophie Giquel-Bettan and overnight co-leader Sophie Walker were all on five-under-par and each rued a few missed putts, although their long games were excellent.
Lee-Anne Pace, Rebecca Hudson and Nobuhle Dlamini are a stroke further behind on four-under-par. Pace's round included an eagle on the par-five second hole, where she pitched in from 45 metres using a 60 degree wedge.