B Venkata Ramana Murthy, the deceased, had retired from the railways and lived in Kancharapalem area, police said.
Financial disputes or some previous enmity could be behind his killing, police suspect.
The body was found near the residential quarters of J Vara Prasad, a junior assistant at Andhra University.
Assistant Commissioner of Police A Narasimha Murthy said the assailants seemed to have attacked the victim with a hammer and sticks, among other weapons.
He had multiple injuries on the body, the ACP said.
Police are searching for Vara Prasad and his friend Jagadeesh, with whom the victim was seen last.
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