Background Paediatric diarrhoea and malnutrition have a bidirectional relationship, which in turn augments the presence of each other. The diarrhoeal diseases in children can be prevented by using oral rehydration solution (ORS) and oral zinc sulfate. The relationship between paediatric diarrhoea treatment guidelines with the nutritional status is not yet investigated, and this study primarily aims to examine the relationship of recommended diarrhoea case management practices with paediatric undernutrition (wasting, stunting and underweight) among children aged between 0 to 59 months. Methods Data from Pakistan Demographic & Health Surveys (PDHS) conducted in 2012–2013 and 2017–2018 were used in this study to investigate the relationship between paediatric diarrhoea treatment adherence with the various forms of paediatric undernutrition. Data from children with complaints of acute watery non-dysenteric diarrhoea was used in this study, whereas data from those children presented with complaints of either dysentery, and/or severe dehydration, and/or incomplete anthropometry were excluded. Children were classified as complete adherent, partial adherent and non-adherent based on ORS and oral zinc sulfate consumption. The relationship of diarrhoea case management practices with different types of nutritional status was assessed using a binomial logistic regression method. Results The malnutrition in children with acute non-dysenteric diarrhoea is 54.2% in 2012–2013, which decreased to 48.2% in the succeeding survey of 2017–2018. Only 6.2% (1% in 2012–2013 ~ 10% in 2017–2018) children of Pakistan received appropriate treatment for managing their diarrhoea. However, no relationship between the diarrhoea case management and paediatric undernutrition was observed. Conclusion This study found did not demonstrate a significant connection of diarrhoea case management strategies with paediatric undernutrition. This highlights the complexity of addressing both diarrhoea and malnutrition in children. Future research should emphasize the identification and resolution of the multifactorial factors, which contribute to paediatric undernutrition, integrating both diarrhoea management and nutritional improvement strategies.