You also can stay in AP forest Guest houses there in horsley hills...for that contact forest ranger office at Madanapalle before going to Horsley Hills. It's better than and cheaper than Punnami Resorts.
There are a few lodges and hotels in Madanapalle.
AP Tourism's Haritha Resort
One can stay at AP Tourism's Haritha Resort. Rooms can be reserved at the Governer's Bungalow, there is a nice viewpoint behind this building. The resort has a gymnasium and a swimming pool which is overkill for this small place. One can take a chance and not book in advance but this is not recommended on long weekends and holidays.