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The incident happened around 11.15 pm on Thursday in Alinagar in Bahera police station area, they said.
The pandal caught fire during the bursting of firecrackers, eyewitnesses said.
It is suspected that a few inflammables kept inside the pandal helped the fire to spread rapidly, police said.
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Three cows were also killed in the fire, police said.
“I have ordered an inquiry to find the exact cause of the fire. In the meantime, the district administration is providing all possible assistance to the families of the victims as per disaster management guidelines,” District Magistrate Rajeev Roshan told PTI.
Senior Superintendent of Police Jagunath Reddy said fire tenders were sent to the spot immediately after information was received about the blaze.
“The fire was brought under control after some time. The bodies have been sent for post-mortem examinations,” he said.