It was a poor early showing from the current Premier League champions as Gerard Deulofeu and Troy Deeney came close in the opening ten minutes. It would get worse and worse for The Blues as Tiémoué Bakayoko was given his marching orders on the half-hour mark before Deeney dispatched a penalty three minutes from the break.
It didn't look to be getting any better for The Blues as Watford continued to prove a danger but looked to have stolen a point with Eden Hazard's excellent equaliser, however a triple blow from Daryl Janmaat, Deulofeu and Roberto Pereyra rounded off a miserable five days for Conte.
Looking shaky from the off
Conte's side headed into the clash looking to shake off the surprise 3-0 defeat to AFC Bournemouth midweek, but knew they faced a tough test in Gracia's first home game in charge and the honeymoon period showed to be still in full-swing in the opening minutes.
Bakayoko's short night at Vicarage Road got off to a shocker as his loss of possession produced Watford's first opportunity. The Hornets broke quickly through new recruit Deulofeu who opted to go alone but the effort from a tight angle could only hit the side-netting.
Deeney should have opened the scoring seconds later as he took advantage of Chelsea's lapse in concentration; the skipper did well to peel away from his marker and be left clear at the back post but somehow managed to slice the effort well wide of the mark.
Given his marching orders
Bakayoko's night was going to go from bad to worse as he was given his marching orders from referee Craig Pawson. The Frenchman's heavy touch left him prone as he lunged to regain control and taking Richarilson down with Pawson having no hesitation in sending him for an early bath.
Taking a deserved lead
The momentum belonged to Watford in both performance and numbers and the lead seemed inevitable for Gracia's men, and it came just before the break as Deulofeu was released down the right and eventually brought down by the onrushing Thibaut Courtois. The Belgian looked to redeem himself as Deeney stepped up for the spot-kick, but he was left rooted as the striker buried it into the bottom corner.
Picking up where they left off
Gracia's looked to do the same again as they came out for the second period, and could it of easily been two on the hour mark.
Deulofeu looked dangerous on his home debut and went close again as he curled an effort from 20 yards just wide. Richarlison almost punished Chelsea instantaneously but his effort across goal was just past the post of Courtois.
Saving a point ?
It had been a very poor showing from Chelsea throughout most of the clash, but had begin to prove dangerous as the clash entered the final ten minutes and were eventually rewarded for their persistence.
It was a stellar effort from Hazard, who has proven Chelsea's saviour more than a few times in the past, that produced the equaliser. The winger picked up the ball 25 yards out before cutting it inside and hitting a sweet effort beyond the reach of Orestis Karnezis and into the bottom corner.
Sneaking back ahead
Despite conceding, it didn't seem to shake Watford's confidence one bit, and it was only three minutes after conceding they found themselves back ahead.
It was great work from Janmaat as he cut in from the right and played a cut one-two with Pereyra. The full-back then did well to skip past two challenges before coolly slotting it into the bottom corner.
Dealing a late double blow
Despite regaining their deserved lead Watford looked to be far from finished, as they found time to deal two more knockout blows to the champions.
The first came two minutes from the end as Deulofeu went on a mazy run from inside his own area. The Spaniard crept into area with the help of Deeney who dragged away two defenders before a deflection took the effort beyond Courtois.
Chelsea's fate was sealed in extra-time as Abdoulaye Doucouré did excellently to slip the ball through to Pereya, before the Argentine did well to compose himself before firing into the far corner.