TDP chief and Andhra Pradesh Chief Minister N Chandrababu Naidu dubbed the "morale boosting victory" as an "endorsement" of his three-year rule, while YSRC president Y S Jaganmohan Reddy called the loss a "temporary setback".
Bhuma Brahmananda Reddy, TDP candidate and a political novice, won the bypoll with a margin of 27,466 votes. He dealt a crushing blow to his YSR Congress rival Silpa Chandra Mohan Reddy, a former minister, by securing 56 per cent of the valid votes polled.
The Congress candidate lost his deposit, getting only 1,382 votes, sources said here, adding 1,231 NOTA votes were polled.
The by-election was held following the death of sitting MLA Bhuma Nagi Reddy, who had won the seat as YSRC nominee in 2014 by a margin of 3,600 votes against TDP's Silpa Chandra Mohan Reddy.
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In February 2016, Nagi Reddy switched over to the ruling party, but died of a heart attack in March this year.
Just days ahead of the by-poll, Silpa joined the YSRC after it became clear the TDP would field Nagi Reddy's nephew Brahmananda Reddy.
"People have endorsed development agenda, upheld values in public life. Rejected and punished negative politics and disorderliness. It has given us a new strength," the chief minister said.
On his part, Jagan said, "I would accept the people's verdict, but at the same time it is a mistake for Chandrababu Naidu to claim victory.
"The setback (for the YSRC) is temporary and it is not prudent for Chandrababu Naidu to describe it as a victory," the Leader of Opposition added.