Thick black smoke enveloped the area but no causalities were reported, fire services officials said. It's a residential area, with some factories.
People living in the surrounding area were evacuated by authorities as huge flames erupted from the factory.
The fire started at around 9 am and was brought under control by afternoon. The cause was still not known.
"Fire-fighting operation is still continuing....We are using foam to control the fire. Apart from four fire engines and three sophisticated vehicles, water tankers from the municipal corporation are also helping the operation," a senior fire services official told PTI.
Hyderabad Mayor Bonthu Rammohan, who visited the spot, said the state Government was considering shifting the chemical factories from the residential areas (such as this) and the process to identify such factories was on.