Nomula Bhagat of TRS was leading by 2,487 votes over his nearest rival K. Jana Reddy of Congress after the completion of third round of counting.
In the three rounds, TRS candidate polled 11,505 votes, Jana Reddy secured 9,018 votes while BJP's Ravi Kumar Naik garnered only 509 votes.
The counting was on in two large halls, each with seven counting tables. About 400 officials would be involved in counting and related activity.
Officials expect the counting to be completed in 25 rounds. The result is expected to be announced by 2 p.m.
The constituency had witnessed 86.18 per cent polling on April 17 despite the Covid-19 surge. Out of 2.20 lakh voters, 1.89 lakh had cast their votes.
As many as 41 candidates, including three women, contested the by-election, which was necessitated due to the death of sitting legislator Nomula Narasimhaiah of TRS.
The ruling party fielded Narasimhaiah's son Nomula Bhagat, a debutant who took on veteran Congress leader and seven-time MLA Jana Reddy of Congress party.
In 2018, Nomula Narasimhaiah had won the seat by defeating Jana Reddy of Congress by about 8,000 votes. Nomula polled 83,655 votes while Jana Reddy garnered 75,884 votes.
BJP's K. Niveditha Reddy had polled only 2,675 votes.
TRS had polled 46.34 per cent votes while Congress secured 42.04 per cent vote. BJP could get only 1.48 per cent votes.