Dempo conceded a last-minute goal against Al Muharraq of Bahrain and missed out on a chance to set one foot into the last 16 stage of the AFC Cup Group E football tournament, at the Nehru Stadium in Margao, Goa, on Tuesday.
Substitute Madhkoor headed home a well-directed cross by Leandson in the 90th minute to give Al Muharraq their first win and hand the hosts their first defeat.
Dempo, who took field without two key players striker Ranty Martins and midfielder Roberto D' Silva both out due to double bookings, still top the group with seven points from four matches.
They won twice and drew once in their earlier three group round-robin matches.
Al Muharraq, who drew all their earlier three matches and have six points from four matches, are placed second.
Referee Vominh Tri of Vietnam showed yellow cards to Al Muharraq's Juliano De Paula and Dempo's Valeriano Rebello.
Rebello will miss Dempo's next match against Al Maged on May 5.
Dempo coach Armando Colaco said his boys didn't deserve to lose and the visitors were fortunate to score a last-minute goal.
"Our youngsters played well in absence of Ranty Martins and Roberto D'Silva and almost managed to draw the game. Now we must try to collect points from the two matches remaining against Al Maged of Syria as we will play with full strength and later against Al Faisaly of Jordan," he said.
Al Muharraq coach Salman Ahmed said, "It's the best match we have played. The win will revive out team's chances for a berth in the next round."