Hi Vikram, this is very good and basic question and most of the new comers have confusion on this.
I also did some study and want to share my learning with you.
QEMU (Quick Emulator) is a hyper visor while KVM is a hardware accelerator. KVM itself is fully utilized by QEMU hypervisor.
If you create a Virtual machine with virt type "QEMU", the performance of VM will be slow and if you create virtual machine using the KVM as virt type then VM performance will be faster than the VM created by using QEMU. CPU instruction gets executed fast in VM that is using kvm as hardware accelerator.
This different performance is observed because of different hardware accelerators used.
In case of QEMU "virt type", tcg accelerator is used while VM created using KVM virt type uses "kvm" hardware accelerator.
In case of KVM (Kernal Virtual Machine), hypervisor would be able to map instructions meant to execute on virtual CPU will be mapped to physical CPU. That's why performance becomes good. In case of intel x86 hardware, VT-X technology supports CPU slice concepts. Each CPU slice is mapped to Virtual CPU to each VM and it is achieved with the help of KVM + QEMU.