City Task Force police raided a rented flat at city's Birla Junction area and arrested a couple and one more person, allegedly a customer, Inspector, City Task Force G V Ramana said.
Police also rescued two girls, who were allegedly pushed into the flesh trade and recovered Rs 1,000 cash.
The couple was identified as D Ramakrishna and D Sankuthala.
Police said that the couple had been running the racket for past few months and had lured girls from various parts of Telangana and Andhra Pradesh to push them into flesh trade.