Local outfit battled back to limit Hyderabad unit to 140/8 after Gilchrist (61 off 49) threatned to take the game away with a blazing knock. And replied with 141 for 2 to win with four overs to spare.
Yusuf Pathan hit a blistering 37-ball 68 with nine hits to fence and two over it. Smith scored a sedate 40 (43 balls, 4X4s). The duo edged their side closer with a quickfire opening stand of 109-run in 12.4 overs.
Mohd Kaif (17* off 14) along with Watson (5*) completed the formalities.
This win takes Royals to numero uno spot in points table with 12 points from 6 wins while Hyderabad relegated to bottom. Hyd on par with Bangalore with four points from two wins in eight games but ahead in net run-rate.
Earlier Royals' bowlers unpurterbed by Gilchrist's onslaught early on made a fine comeback in the middle overs thro' Munaf (1 for 28) and Trivedi (1 for 8). The duo's accuracy tied down Hyd batters and induced 'em to commit harakiri.
Skipper Warne led Royals from the front with a tidy spell of 2 for 20 besides a sharp effort in the field to dismiss Rohit Sharma.
Yusuf Pathan and Shane Watson too joined the party with a wicket apiece.
Chargers got off to a blazing start with openers Gilly and Gibbs (19 off 20) firing 61 runs in less than seven overs before a dramatic collapse ensured Hyd unit post a mediocre total. They lost their last eight wickets for 52 runs. But for Venu's (23 off 11) rearguard action Hyderabad's innings would have folded up for much less than they settled for.
Bangladesh, who were put in to bat, had a scorcher of start with Gilchrist making his intent clear dispatching the very first ball to cover boundary and followed it up with a ferocious cut to point fence off the last ball of the over bowled by Tanvir. In the third over Gilly hit three boundaries to send Tanvir-who holds the record of best haul in T20 with 6/14, out of the attack.
The former Aussie gloveman continued his rampaging act further belting his fellow countryman Watson for a six and four. He scored freely early in his innings.
Shane brought in Munaf as first change in the fifth over and this move paid off with India international bowling striking the line and length early on cramped free-flowing Gilchrist for room. Munaf ended Gibb's torrid time at the wicket. Gibbs, who was uncertain with his timing, failed to capitalise on a repreive offered by his international skipper off Munaf when he edged McGrath-like accurate seamer for a regulation caught behind.
Styris joined Gilly in the middle and the Trans-Tasman pair briefly threatned to swing the game in Hyd's favour before Styris looking to up the scoring rate top-edged a heave off Pathan and the Warne gleefully held on to the skier. The Hyd score read 88/2 in the 13th over.
In the following over Trivedi started the rot when he had the dangerous Gilly caught behind. Warne sent the in-form Rohit Sharma packing when his throw found the dashing India batsman short of crease. The Sheikh of Tweak then dismissed the restless Afridi and Ravi Teja while Watson accounted for Bangar to reduce Chargers to 105/6 in the 17th over.
However Venu ensured Hyderabad side reach a respectable 140 with a little useful cameo knock.