First half of the movie is average. Second half is the one that takes the movie to the greatest heights. In fact, it even makes the viewers forget the movie's shortfalls and let them carry good memories with them once they leave the theater.
Overall, it is worth a watch. I do not think we could get to see another movie like Magadheera in near future. Reason is simple, tollywood is used to making movies with 50-50 concept (i.e. 50% of the budget goes to stars remuneration and the rest to the movie making). Because of which, movies are made to watch only on star value but not by its content. The day we believe the stories than star value, we will get to see great movies.