Diffuser is a flow device which is used to reduce the velocity of flow. The performance of a diffuser is evaluated using metrics like flow uniformity and pressure recovery. The present work is part of development of a new compact diffuser design that can be incorporated in a heat exchanger for flow distribution. The design concept employs several baffles arranged as frustum of cones with an aerofoil cross-section along the flow direction. The performance enhancement is obtained by optimal positioning of these baffles, and this problem is solved as a numerical optimisation problem. The performance of the diffuser is evaluated using a CFD model, and the same is used for computing the design sensitivity and to perform optimisation. © 2023, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.