King Ugrasena (Govindarajula Subba Rao) of Dhara Nagaram had three daughters: Rupasundari (Santakumari) who is married to her cousin Haramati (Subba Rao), Hemasundari (Malathi) who is married to her cousin Kalamata (Relangi), and Gunasundari (Sriranjani).
During a discussion, the King asked his daughters who they loved the most. Rupa and Hema told him they loved him the most, even more than their husbands. Gunasundari who is unmarried insists that she will love her husband the most once she is married. She goes on to say that she will love him more than her father regardless of his appearance or physical condition.
Her father the King was offended by this and forced Gunasundari to marry a hideous and disabled man, Daivadheenam (Kasturi Siva Rao). After the arranged marriage to the ugliest man in the country, the king exiles his daughter to live outside the palace with her new husband whom she now loves more than the King.
Eventually, the King is wounded and develops a chronic illness. The Physicians tell him the wound could only be cured with the diamond "Mahendra Mani". The King sends his three sons-in-law on a journey to find the diamond.
Daivadheenam overcomes his disabilities during the quest for "Mahendra Mani". No one knew that Daivadheenam was once a handsome prince who had been cursed by his guru for misconduct and character flaws. While fulfilling the quest of finding the diamond and overcoming his physical limitations Daivadheenam's character was fixed. He then brings the diamond to the palace and cures the king. This breaks Daivadheenam's curse and he is returned to his original form.
^Gudipoodi, Srihari. "Telugu Cinema - Past and Present". Idlebrain. Retrieved 1 October 2022. Gunasundari Katha was an experiment by itself with Kasturi Siva Rao, a comedian, as hero. It clicked and made good profits.