Opener Akshath Reddy laid the foundation of their challenging 278-run chase but missed the triple figure mark by six runs as the home side was reduced to 216/5, needing 62 off 53 balls.
Ambati Rayudu (76) and Bhandari revived their chase in a 43-run partnership from 37 balls but the duo could not take them over the line, with the former getting out in the 48th over.
Number 7 Bhandari, however, remained calm under pressure to anchor the chase with three balls to spare as a star- studded Saurashtra suffered their second successive defeat to be on four points after three matches in the seven-team group D table.
Hyderabad have 12 points from four matches as they returned to winning ways after their reversal against group D leaders Vidarbha who put one foot in the quarterfinals with their fourth win on the trot.
Saurashtra's star players -- Robin Uthappa (14), Cheteshwar Pujara (10) and Ravindra Jadeja (7) -- once again failed to get going after they opted to bat
It was opener Samarth Vyas who kept it going at one end with a fighting 57 before being cleaned up by the legspinner Bhandari, while lower down the order Prerak Mankad (62) and Arpit Vasavada (49) came up with significant contributions to post a fighting total.
Jadeja was tidy in his bowling conceding 39 from his full quota but returned wicketless, while leftarm pacer Jaydev Unadkat gave away 59 runs from his 10 overs.
Ranji champions Vidarbha overcame a jittery start to prevail over Services by 17 runs at the Gymkhana Ground in Secunderabad, consolidating their lead with 16 points from four matches.
Half of Vidarbha's side were dismissed for 50 runs inside 14 overs with Raushan Raj (3/49) ripping through their top- order.
Karn Sharma came up with a splendid allround effort (54 and 2/50) while Apoorv Wankhade (73) and Akshay Karnewar (45) also made valuable contributions to lift them to a fighting 267/9.
Services' No 9 batsman Diwesh Pathania stood tall amid the ruins with a valiant 100 not out from 77 balls, but his effort went in vain as they suffered a fourth defeat in row.
Saurashtra 277/7; 50 overs (Prerak Mankad 62, Samarth Vyas 57, Vasavada 49; Mohammed Siraj 3/46) lost to Hyderabad 278/6; 49.3 overs (Akshath Reddy 94, Ambati Rayudu 76, Akash Bhandari 41 not out) by four wickets.
At Gymkhana Ground, Secunderabad: Vidarbha 267/9; 50 overs (Apoorv Wankhade 73, Karn Sharma 54, Akshay Karnewar 45; Raushan Raj 3/49) beat Services 250/9; 50 overs (Diwesh Pathania 100 not out, Soumik Chatterjee 54) by 17 runs.
At AOC Centre Thapar Stadium, Secunderabad: Chhattisgarh 251/8; 50 overs (Shashank Chandraker 59, Vishal Kushwah 48; Ram Dayal 3/35, Umar Nazir 3/55) beat Jammu & Kashmir 246; 49.3 overs (Ahmed Bandy 75, Parvez Rasool 44, Shubham Pundir 44; Pankaj Rao 3/44, Shivendra Singh 3/46).
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