Preliminary investigation showed that the boys, aged between 15 and 16 years, stabbed their classmate Chhabila Sahu to death at Bramhanidei ghat, a waterfall near Mohana on August 28 and threw the body into the water, the sources said.
The body bearing deep injury marks on the neck was fished out on August 31 by the police, Odisha Disaster Rapid Action Force and fire brigade personnel in a joint search, the sources said.
Previous enmity was believed to have led to the killing as the boys had altercations with the victim in the past, they said.
On August 28 the seven students went to the waterfall after bunking classes.
Following an argument, one of the boys whipped out a knife and stabbed Sahu with his body being thrown into the water, the sources said.
The boys, all class X students of Government High School at Mohana were produced before the Juvenile Justice Board in Parlakhemundi after being arrested yesterday.
The boys were remanded to a juvenile home in Berhampur.