Sen, 26, who had made it to the Hong Kong Open final but has gone without a title this year, had a tough time beating Shetty in the opening game.
Star Indian shuttlers Satwiksairaj Rankireddy and Chirag Shetty entered the men's doubles second round with a tough straight-game win over Chinese Taipei's Chang Ko-Chi and Po Li-Wei at the Australian Open Super 500 tournament in Sydney on Tuesday.
Kidambi Srikanth registered a superb come-from-behind win over World No 5 Indonesian Jonatan Christie.
Shetty had earlier shocked former world champion Loh Kean Yew of Singapore in straight games in his opening round.
Indian women's badminton star Saina Nehwal crashed out of the women's singles competition in the first round after a loss to China's Zhang Yiman. She lost the match 17-21, 21-19,11-21. After being a game down, Nehwal made a comeback in the second game but lost the final one.
yush Shetty and former World championships bronze medallist Lakshya Sen advanced in the Australian Open in contrasting fashion to set up an all-Indian quarterfinal clash.
Lakshya Sen exits, Mannepalli keeps Indian hopes alive at Arctic Open
Srikanth lost 21-23, 8-21 to Korea's Chia Hao Lee, continuing his dismal run in international circuit this season.
Rankireddy and Shetty, who had arrived in Madrid after winning the Swiss Open Super 300 last week, retired from their first-round match
Srikanth got his act together in the nick of time and reeled off eight straight points to move to a 16-10 lead before keeping his calm to take the match to the decider.
Placed at number 10 in the Race to Guanzhou rankings, Srikanth needed to win the tournament to have any hopes of qualifying for the season-ending World Tour Final in December.
India's Kidambi Srikanth was ousted in men's singles but the women's pair of Treesa Jolly and Gayatri Gopichand progressed to the semifinals of the Macau Open Super 300 badminton tournament in Macau on Friday.
In the men's doubles, seventh-seeded Satwiksairaj Rankireddy and Chirag Shetty beat the Malaysian duo of Man Wei Chong and Kai Wun Tee 21-16 21-14 in a round of 16 match, that lasted 40 minutes.
Prime Minister Narendra Modi on Monday hailed Kidambi Srikanth's silver medal win in the World Badminton Championships, saying it will inspire several sportspersons and further interest in badminton.
However, a tough contest awaits the former world No. 1 as he faces top seed Kenta Nishimoto of Japan next.
Lakshya Sen's title win, a World Championships medal from Satwiksairaj Rankireddy and Chirag Shetty offered hope amidst a difficult 2025 for Indian badminton.
The selectors had also proposed to pick one pair each for men's and women's doubles and two mixed doubles combinations through a round-robin tournament format to decide the final standings.
Kidambi outperforms Sen, Sameer scores upset win
Riding on his back-to-back Super Series triumphs, India's ace shuttler Kidambi Srikanth broke back into the top-10 at eighth in the latest world rankings.
Earlier, a series of unforced errors and bad line judgements put Srikanth, world ranked 24, on the back foot as world No. 20 Ka Long looked in fine fettle during the 38-minute men's singles match.
With Srikanth's defeat, the Indian challenge in Hong Kong also came to an end.
India's challenge at the Japan Super Series came to a grinding halt when shuttler Kidambi Srikanth crashed out of the tournament after suffering a defeat in the quarter-finals of the men's singles event here on Friday.
Prime Minister Narendra Modi on Sunday congratulated shuttler Kidambi Srikanth after he clinched his second Super Series Premier title by lifting the Indonesia Open men's singles trophy in Jakarta.
Ace shuttler Kidambi Srikanth's dream season just got better as the India made it to his third successive Super Series final beating Yuqi Shi 21-10 21-14 at the Australian Open, in Sydney on Saturday.
Kidambi Srikanth, Priyanshu Rajawat and Kiran George won their respective men's singles round-of 16 matches to advance to the quarterfinals late on Thursday night.
Both Sen and Srikanth are fighting to be inside the top 16 by April 28 next year to qualify for the Paris Olympics.
Tanvi Sharma stuns Okuhara, Manraj Singh oust Prannoy to make quarters.
The script remained the same in the second game as well, with Sindhu maintaining her firm grip over the proceedings to race to a 6-0 lead in just two minutes.
President Ram Nath Kovind on Tuesday gave away prestigious Padma awards to 89 winners at Rashtrapati Bhawan in New Delhi.
Kidambi Srikanth made a winning start but PV Sindhu and HS Prannoy were ousted
The Indian men's team, led by Srikanth, had beaten powerhouse and 14-time champions Indonesia in the final to win the country's maiden Thomas Cup title on Sunday.
The Badminton Association of India (BAI) on Friday recommended Kidambi Srikanth for the Khel Ratna award after the top Indian shuttler apologised for pulling out of a tournament midway and show-caused his teammate H S Prannoy for slamming the federation after not being nominated for the Arjuna honour.
He was hailed as the next big thing when he shocked five-time world and two-time Olympic champion, Lin Dan in the final of China Open Super Series Premier event, a performance that also held out promise of a medal at the Rio Olympics.
In other India-related results, it was curtains for Ashmita Chaliha, who lost 17-21, 16-21 to Indonesia's world no. 7 Gregoria Mariska Tunjung in 35 minutes. Both teams had received a bye in their opening match.
Earlier, the 17-year-old made short work of another Taipei shuttler Lin Sih Yun 21-12, 21-7 in the round of 16.
A fast and fluent Lakshya Sen ended a difficult stretch on the international circuit by defeating Japan's Yushi Tanaka in the men's singles final of the US $475,000 Australian Open Super 500 and clinching his first title of the season, in Sydney, on Sunday.
Kidambi Srikanth progressed to the men's singles second round with a stunning win over Chinese Taipei's Chou Tien Chen.
Malaysia's Lee Chong Wei staged a magnificent recovery to beat world No 1 Kidambi Srikanth of India 19-21, 21-14, 21-14 and win the men's singles badminton final at the Commonwealth Games on Sunday.
Kidambi Srikanth, whose stature has grown immensely following a phenomenal 2017, was nominated for the prestigious Padma Shri award by former Sports Minister Vijay Goel.
Kidambi Srikanth continued his good run as he routed Kenta Nishimoto 21-14, 21-13 in the final to clinch the French Open Super Series title on Sunday.
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