The incident took place at Ramdeo Chemicals in the Boisar-Tarapur industrial estate.
The fire engulfed the factory around 11.40 pm yesterday after a massive explosion inside a boiler, a senior police official said.
The impact of the blast was felt in villages around 8 km away from the factory, he said.
Palghar Superintendent of Police (SP) Manjunath Shinge said that during a search, three unidentified bodies were found at the Arti industries site.
"There may be more casualties. Search and rescue operation is going on," the SP said.
Three factories neighbouring Ramdeo Chemicals were also gutted in the blaze and 13 people were injured. They were admitted to various hospitals, another senior police official said.
The fire, which had spread to the other companies, has been brought under control and efforts are on to douse it, the officer said.
He suspected that the fire spread as there were chemical drums inside these companies.
Tarapur Atomic Power Station, which is also located on the Boisar-Tarapur Road, is around 20 km away from the spot, he said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)