Three fire tenders were rushed to the spot and rescue operations are being carried out under the inspection of District Fire Officer Ganesan.
Local MLA Vinod Nikole claimed that more persons have been injured as around 100 workers were inside the factory at the time of the incident.
The police sources said there was lightning in the locality and that could have ignited an explosion.
In a major fire at fire cracker factory in Warangal, almost all those killed were daily labourers, who shouldered the dreams and livelihood of their families.
The Dera, spread over nearly 800 acres, has been divided into ten zones for the purpose of sanitisation and searches.