Replication lagging in VM

[Shrinivasa rao]

Hello,

We have master-slave setup as below:

Master-Physical server
Slave1---Physical server
Slave2---VM
Slave3---VM

We are facing lag issues only on VM slaves. Mysql version is same on both master and slaves. But on VM slaves, we are facing lag. We have checked from storage,OS,Network level but everything seems to be ok.

When we change innodb-flush-log-at-trx-commit from 1 to 0, the lag on VM slaves decreases rapidly. innodb-flush-log-at-trx-commit was set to its original value of 1 right from the begining, only recently we are seeing this issue.

Need help whether above variable is causing any bottleneck.