After the success of Raja Harishchandra, Phalke relocated to Nashik. For his next film, he selected the mythological love story of Nala, a king of Nishadha Kingdom, and Damayanti, a princess of the Vidarbha Kingdom. In spite of completing the pre-production, the filming could not start so he started working on Mohini Bhasmasur, based on a mythological story of Mohini, female avatar of the Hindu god Vishnu, and Bhasmasura, an asura (demon). During the same time, a travelling drama company, Chittakarshak Natak Company, visited Nashik. Phalke requested its proprietor, Raghunathrao Gokhle, to allow two of their actresses to act in the film. Durgabai Kamat was cast as Parvati and her daughter Kamlabai Gokhale as Mohini and became first women to act in the Indian cinema. The film was 3,264 feet (995 m) long and was released on 2 January 1914 at the Olympia Theatre, Bombay. A short comedy film Pithache Panje (Paws of Flour) was released as a "side attraction" with the film. Phalke made his third film Satyavan Savitri based on the legends of Satyavan and Savitri. The film was 3,680 feet (1,120 m) long and was screened on 6 June 1914. Both the films were commercially successful like Raja Harishchandra.
With the success of three films, Phalke was able to repay all his debts. There was huge demand for the film copies from various theater managers in the country. Considering the tremendous response to the films, he decided to buy electronic machinery worth around ₹30,000 and left for London on 1 August 1914, taking with him his three films. Mr. Kepburn of "Bioscope Cine-Weekly", who had helped Phalke during his first London visit, arranged some screenings of the films in London. The films were praised for their technical aspects. Various producers including Cecil Hepworth of Walton Studios requested Phalke to produce films in England. Hepworth placed an offer before Phalke to produce Indian films in England, bringing cast and crew from India whose expenses on travel, lodging and boarding, and salary would be paid by Hepworth. Phalke was offered a monthly salary of 300 pounds along with 20% of the profits. Phalke declined the offer and explained Hepworth that he would continue making films in India. Warner Brothers also offered to buy 200 film copies to which Phalke agreed. However, before the official agreements were to be signed, Phalke had to come back to India after the news about the worrisome condition of his studio.