In 2000, Balakrishna acted in "Goppinti Alludu", directed by E. V. V. Satyanarayana with Simran. In 2001, he starred in the B. Gopal-directed faction film "Narasimha Naidu", opposite Simran once again. The film became the highest-grossing Telugu film of all time until the record was broken by Chiranjeevi's "Indra", which was also directed by B. Gopal. Balakrishna won his first Nandi Award for Best Actor for his performance. In the same year, he appeared in "Bhalevadivi Basu" with Shilpa Shetty and Anjala Zaveri. His 2002 and 2003 films include "Seema Simham" and "Chennakesava Reddy". The former received unfavourable reviews and was a box office flop, but the latter one was critically and financially successful. In 2004, he performed in a remake of the 2003 Tamil film "Saamy", titled "Lakshmi Narasimha", with Asin. The film and Balakrishna's performance won critical acclaim and was a financial success. During the period, he also announced plans to act and direct in the remake of "Nartanasala", starred by his father NTR, and a launch event was held in Hyderabad in March 2003. Produced by Pusapati Lakshmipati Raju, the film was announced to have an ensemble cast also featuring Soundarya, Srihari, Saikumar, Uday Kiran and Asin in lead roles. However, despite a grand launch, the film was later shelved following the sudden demise of Soundarya.