Hi Shambhoo,
I faced this problem myself. The main problem
here is, that Apache FOP does not support hyphenation by default since
most hyphenation dictionaries are not distributed under Apache License.
You can integrate it with a custom DITA-OT plugin. I try to summarize the steps you need to take to integrate it.
1. get a hyphenation dictionary (I recommend the one from the OFFO project which is also mentioned in the given link)
2. place it in the directory of your plugin
3. the plugin should provide a config file for FOP which links to the .jar file from OFFO
4. install the plugin in your DITA-OT
Note: I observed that hyphenate does not effect justified text, so use left aligned text to check if it works.
P.S.: I will edit this post, since I have taken notes on this topic which I first have to find again :D
Regards
Leon