Dempo failed to qualify for the AFC Cup quarter-finals after suffering a 1-3 defeat to Kuwait Sports Club in the round of 16 match in Kuwait City.
Dempo, without key defender Mahesh Gawli, who had to sit out because off two bookings, were the second-best team for most part of the single-leg pre-quarter-final at the Kuwait SC Stadium on Tuesday night.
Syria international midfielder Jehad Al Hussien exposed the weakness in the Dempo defence with a hat-trick to take the former AFC Champions League side to the quarter-finals of the continent's second tier club competition.
Al Hussien opened scoring from the spot in the 22nd minute before adding a second in the 58th.
Dempo's Brazilian midfielder Roberto Mendes Silva pulled one back in the 73rd minute but Al Hussien sealed victory with his hat-trick in the third minute of stoppage-time with another penalty.
The visiting side's Nigerian striker Ranty Martins was shown the red card for protesting against the stoppage-time penalty; he had already received a yellow card in the 62nd minute.
Dempo, who became the first Indian club to make it to the semi-finals of the competition last year, had the first chance to score but Silva's shot from the edge of the area went just wide after 12 minutes.
However, Kuwait SC opened the scoring when they were rewarded a penalty after Dominic Noronha fouled Al Hussien inside the area and the Syrian international made no mistake from the spot.